Motion For Summary Judgment Partial 16 01460 C1

Case 1:16-cv-01460-APM Document 62 Filed 10/03/17 Page 1 of 63
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Attorneys for Plaintiffs International Premium
Cigar and Pipe Retailers Association and Cigar
Rights of America

VMark S. Raffman
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Attorneys for Plaintiff Cigar Association of

America

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA
CIGAR ASSOCIATION OF AMERICA, )

INTERNATIONAL PREMIUM CIGAR )
AND PIPE RETAILERS ASSOCIATION, )
AND CIGAR RIGHTS OF AMERICA, )
)
Plaintiffs, )
)
v. ) Civil Action No. 16-1460 (APM)
)
UNITED STATES FOOD AND DRUG )
ADMINISTRATION, UNITED STATES )
DEPARTMENT OF HEALTH AND )
HUMAN SERVICES, DON J. WRIGHT, )
M.D., and SCOTT GOTTLIEB, M.D. )
)
Defendants. )
MEMORANDUM IN SUPPORT OF PLAINTIFFS MOTIONS

FOR A PRELIMINARY INJUNCTION AND FOR PARTIAL SUMMARY JUDGMENT
Dated: October 3, 2017 Michael J. Edney, DC Bar No. 492024

Caroline M. Mew, DC Bar No. 467354
NORTON ROSE FULBRIGHT US LLP
799 9th Street, NW, Suite 1000
Washington, DC 20001-4501
Telephone: (202) 662-0200
Fax: (202) 662-4643
michael.edney@nortonrosefulbright.com
caroline.mew@nortonrosefulbright.com

Cigar and Pipe Retailers Association and
Cigar Rights of America
Mark S. Raffman, DC Bar No. 414578

GOODWIN PROCTER LLP
901 New York Avenue NW
Washington, DC 20001
Telephone: (202) 346-4000
Fax: (202) 346-4444
mraffman@goodwinlaw.com

America
TABLE OF CONTENTS
Page
INTRODUCTION ......................................................................................................................... 1
BACKGROUND ........................................................................................................................... 3
I. The Cigar and Pipe Tobacco Industries ................................................................. 3
II. Congress Enacts the Tobacco Control Act to Combat Product
Manipulation and Marketing to Youth .................................................................. 4
III. The Rule Subjects All Cigars and Pipe Tobacco to the Cigarette
Regulatory Scheme ................................................................................................ 6
A. The Premarket Review Process ................................................................. 6
B. The FDA Massively Increases the Size and Scope of Health
Warnings on Cigar Packages and Advertisements .................................... 8
1. The Existing Cigarette and Cigar Warning Regimes..................... 8
2. The Expanded FDA Warnings....................................................... 8
C. The FDA Issues a Rule Imposing User Fees on Cigars and Pipe
Tobacco, But Not E-Cigarettes ................................................................ 11
IV. The FDAs New Regulatory Approach ............................................................... 12
ARGUMENT............................................................................................................................... 14
I. Standard of Review.............................................................................................. 14
II. The FDAs Warnings Violate the First Amendment ........................................... 16
A. The FDAs Larger and Broader Warnings Violate the First
Amendment.............................................................................................. 16
1. The FDAs Warnings Restrict Commercial Speech, and the
Central Hudson Test Applies....................................................... 17
2. The FDAs Warnings Fail the Central Hudson Test ................... 18
a. The FDAs warnings do not serve a substantial
government interest.......................................................... 19
b. The FDAs warnings do not directly or materially
advance the reduction of underaged cigar and pipe
tobacco use....................................................................... 20
c. The FDAs warnings are not narrowly tailored ............... 22
B. The FDAs Warnings Also Fail the Standard for Compelled
Commercial Disclosures .......................................................................... 27
C. The FDAs Warning Plan Pre-Approval Requirement Violates the
First Amendment ..................................................................................... 30
-i-
TABLE OF CONTENTS
(continued)
Page
1. The Warning Plan Scheme Is an Unconstitutional Prior

Restraint ....................................................................................... 30
2. The Warning Plan Scheme Is an Unconstitutional
Restriction of Speech ................................................................... 32
III. The FDAs Warnings Violate the Tobacco Control Act and the
Administrative Procedure Act.............................................................................. 33
A. The Tobacco Control Act Requires Agency Findings on How
Warnings Will Affect Tobacco Use......................................................... 33
B. The Rule Is Arbitrary and Capricious Because the FDA Ignored
Statutorily Required Considerations and Inverted Its Own Risk
Assessment............................................................................................... 35
IV. Plaintiffs Are Entitled to a Preliminary Injunction Against Enforcement of
the Warning Requirements .................................................................................. 37
V. The FDAs Decision to Impose User Fees on Cigars and Pipe Tobacco,
But Not E-Cigarettes, Is Contrary to Law ........................................................... 39
A. Congress Did Not Limit User Fees to the Tobacco Products Listed
in its Allocation........................................................................................ 40
B. Congress Deliberately Imposed a User Fee, Not a Tax ....................... 42
C. The User Fee Rule, As Impermissible Economic Favoritism,
Raises Constitutional Questions Under the Fifth Amendment ................ 43
VI. The FDA Erroneously Interpreted the Act to Treat Retailers Who Blend
Finished Pipe Tobacco as Tobacco Product Manufacturers ................................ 44
VI. Pipes Are Not Components of a Tobacco Product........................................... 46
CONCLUSION............................................................................................................................ 49
-ii-
TABLE OF AUTHORITIES
Page(s)
Cases
11126 Baltimore Blvd., Inc. v. Prince Georges Cty.,

58 F.3d 988 (4th Cir. 1995) .....................................................................................................32
*44 Liquormart, Inc. v. Rhode Island,

517 U.S. 484 (1996)...........................................................................................................17, 32
Adirondack Med. Ctr. v. Sebelius,

740 F.3d 692 (D.C. Cir. 2014) .................................................................................................41
AFL-CIO v. FEC,
333 F.3d 168 (D.C. Cir. 2003) .................................................................................................16
All. for Nat. Health U.S. v. Sebelius,

775 F. Supp. 2d 114 (D.D.C. 2011) .............................................................................15, 27, 41
All. for Nat. Health U.S. v. Sebelius,

786 F. Supp. 2d 1 (D.D.C. 2011) .............................................................................................15
*Am. Beverage Assn v. City & Cty. of S.F.,

--- F.3d ----, 2017 WL 4126944 (9th Cir. Sept. 19, 2017)...............................22, 24, 29, 38, 39
Am. Council of Life Insurers v. D.C. Health Benefit Exch. Auth.,

815 F.3d 17 (D.C. Cir. 2016) .............................................................................................42, 43
Am. Meat Inst. v. U.S. Dept of Agric.,

760 F.3d 18 (D.C. Cir. 2014) (en banc).............................................................................19, 28
Am. Petroleum Inst. v. EPA,

862 F.3d 50 (D.C. Cir. 2017) ...................................................................................................36
Armour v. City of Indianapolis,

132 S. Ct. 2073 (2012).............................................................................................................43
Assn of Private Colls. & Univs. v. Duncan,

870 F. Supp. 2d 133 (D.D.C. 2012) .........................................................................................36
Bad Frog Brewery, Inc. v. N.Y. State Liquor Auth.,

134 F.3d 87 (2d Cir. 1998).......................................................................................................17
Burk v. Augusta-Richmond Cty.,

365 F.3d 1247 (11th Cir. 2004) ...............................................................................................31
-iii-
Bus. Roundtable v. SEC,

647 F.3d 1144 (D.C. Cir. 2011) .........................................................................................46, 49
*Central Hudson Gas & Elec. Co. v. Pub. Serv. Commn of N.Y.,
447 U.S. 557 (1980).......................................................................17, 18, 19, 20, 27, 28, 30, 32
Chamber of Commerce v. SEC,

412 F.3d 133 (D.C. Cir. 2005) .................................................................................................46
CTIA-The Wireless Assn v. City of Berkeley, Cal.,

854 F.3d 1105 (9th Cir. 2017) .................................................................................................28
Cty. of L.A. v. Shalala,

192 F.3d 1005 (D.C. Cir. 1999) ...............................................................................................41
Del. Dept of Nat. Res. & Envtl. Control v. EPA,

785 F.3d 18 (D.C. Cir. 2015) ...................................................................................................35
Desert Outdoor Adver., Inc. v. City of Moreno Valley,

103 F.3d 814 (9th Cir. 1996) ...................................................................................................31
Discount Tobacco City & Lottery, Inc. v. United States,

674 F.3d 509 (6th Cir. 2012) ...................................................................................................30
Dist. Hosp. Partners, L.P. v. Burwell,

786 F.3d 46 (D.C. Cir. 2015) ...................................................................................................36
Dwyer v. Cappell,
762 F.3d 275 (3d Cir. 2014)...............................................................................................18, 29
Edenfield v. Fane,
507 U.S. 761 (1993)...........................................................................................................18, 20
Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Constr. Trades Council,
485 U.S. 568 (1988).................................................................................................................34
Elrod v. Burns,
427 U.S. 347 (1976).................................................................................................................38
Emilys List v. FEC,

581 F.3d 1 (D.C. Cir. 2009) .....................................................................................................42
Empress Casino Joliet Corp. v. Balmoral Racing Club, Inc.,

651 F.3d 722 (7th Cir. 1992) ...................................................................................................42
Entmt Software Assn v. Blagojevich,

469 F.3d 641 (7th Cir. 2006) .............................................................................................22, 28
- iv -
*FW/PBS, Inc. v. City of Dall.,

493 U.S. 215 (1990)...........................................................................................................30, 31
Gonzales v. Carhart,
550 U.S. 124 (2007).................................................................................................................47
Gordon v. Holder,
721 F.3d 638 (D.C. Cir. 2013) .................................................................................................38
Greater New Orleans Broad. Assn, Inc. v. United States,

527 U.S. 173 (1999).................................................................................................................23
Gustafson v. Alloyd Co., Inc.,

513 U.S. 561 (1995).................................................................................................................48
Ibanez v. Fla. Dept of Bus. & Profl Regulation, Bd. of Accountancy,

512 U.S. 136 (1994).................................................................................................................29
Individual Reference Servs. Grp., Inc. v. FTC,

145 F. Supp. 2d 6 (D.D.C. 2001) .............................................................................................15
Intl Dairy Foods Assn v. Amestoy,

92 F.3d 67 (2d Cir. 1996).............................................................................................20, 28, 33
*Lorillard Tobacco Co. v. Reilly,

533 U.S. 525 (2001)...................................................................................18, 19, 20, 22, 23, 33
Milavetz, Gallop & Milavetz, P.A. v. United States,

559 U.S. 229 (2010).................................................................................................................28
*Motor Vehicle Mfrs. Assn of U.S., Inc. v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29 (1983).......................................................................................................15, 35, 36
*N.Y. Magazine v. Metro. Transp. Auth.,

136 F.3d 123 (2d Cir. 1988).....................................................................................................31
Natl Assn of Mfrs. v. SEC,

748 F.3d 359 (D.C. Cir. 2014) .................................................................................................22
Natl Assn of Mfrs. v. SEC,

800 F.3d 518 (D.C. Cir. 2015) .................................................................................................22
*Natl Cable Television Assn, Inc. v. United States,

415 U.S. 336 (1974)...........................................................................................................42, 43
Natl Mining Assn v. Kempthorne,

512 F.3d 702 (D.C. Cir. 2008) .................................................................................................43
-v-
Natl Wildlife Fedn v. Hodel,

839 F.2d 694 (D.C. Cir. 1988) .................................................................................................45
Noble Energy, Inc. v. Salazar,

671 F.3d 1241 (D.C. Cir. 2012) ...............................................................................................40
Nutritional Health All. v. Shalala,

144 F.3d 220 (2d Cir. 1998).....................................................................................................32
Poett v. United States,

657 F. Supp. 2d 230 (D.D.C. 2009) .........................................................................................15
Pub. Citizen Inc. v. La. Attorney Disciplinary Bd.,

632 F.3d 212 (5th Cir. 2011) ...................................................................................................29
Pub. Citizen v. FMCSA,

374 F.3d 1209 (D.C. Cir. 2004) ...............................................................................................35
Pursuing Am.s Greatness v. FEC,

831 F.3d 500 (D.C. Cir. 2016) ...........................................................................................18, 38
*R.J. Reynolds Tobacco Co. v. FDA,

823 F. Supp. 2d 36 (D.D.C. 2011) ...............................................................................16, 37, 38

845 F. Supp. 2d 266 (D.D.C. 2012) .........................................................................................26

696 F.3d 1205 (D.C. Cir. 2012) ...................................................................8, 18, 19, 20, 21, 22
Riley v. Natl Fedn of the Blind of N.C., Inc.,

487 U.S. 781 (1988).................................................................................................................31
Rosen v. Port of Portland,

641 F.2d 1243 (9th Cir. 1981) .................................................................................................31
Rubin v. Coors Brewing Co.,

514 U.S. 476 (1995).....................................................................................................17, 20, 22
Se. Promotions Ltd. v. Conrad,

420 U.S. 546 (1975).................................................................................................................32
Seafarers Intl Union v. U.S. Coast Guard,

81 F.3d 179 (D.C. Cir. 1996) ...................................................................................................43
In re Search of Kittys E.,

905 F.2d 1367 (10th Cir. 1990) ...............................................................................................31
- vi -
Smoking Everywhere, Inc. v. FDA,

680 F. Supp. 2d 62 (D.D.C. 2010) ...........................................................................................38
St. Joseph Abbey v. Castille,

712 F.3d 215 (5th Cir. 2013) ...................................................................................................43
Stewart v. D.C. Armory Bd.,

789 F. Supp. 402 (D.D.C. 1992) ..............................................................................................39
Thompson v. Clark,
741 F.2d 401 (D.C. Cir. 1984) ...........................................................................................46, 49
Thompson v. W. States Med. Ctr.,

535 U.S. 357 (2002).................................................................................................................27
Tillman v. Miller,
133 F.3d 1402 (11th Cir. 1998) .........................................................................................24, 29
U.S. West, Inc. v. FCC,

182 F.3d 1224 (10th Cir. 1999) ...............................................................................................26
United Space All., LLC v. Solis,

824 F. Supp. 2d 68 (D.D.C. 2011) ...........................................................................................15
United States v. Sperry Corp.,

493 U.S. 52 (1989)...................................................................................................................43
United States v. Wenger,

427 F.3d 840 (10th Cir. 2005) .................................................................................................28
Va. State Bd. of Pharmacy v. Va. Citizens Consumer Prot. Council,

425 U.S. 748 (1976).................................................................................................................32
*Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio,

471 U.S. 626 (1985).............................................................................19, 22, 24, 27, 28, 29, 30
Rules and Statutes
5 U.S.C. 603................................................................................................................................46
5 U.S.C. 604................................................................................................................................46
5 U.S.C. 706................................................................................................................................15
7 U.S.C. 518d..............................................................................................................................41
15 U.S.C. 1333..................................................................................................................8, 24, 36
21 U.S.C. 321(rr)(1)....................................................................................................................47
- vii -
21 U.S.C. 387..............................................................................................................................44
21 U.S.C. 387a ..............................................................................................................................5
21 U.S.C. 387d........................................................................................................................5, 44
21 U.S.C. 387e ..................................................................................................................5, 44, 45
21 U.S.C. 387f ........................................................................................................5, 6, 11, 33, 34
21 U.S.C. 387g............................................................................................................................47
21 U.S.C. 387i.........................................................................................................................5, 44
21 U.S.C. 387j...............................................................................................................5, 7, 44, 47
21 U.S.C. 387q............................................................................................................................36
21 U.S.C. 387s ..........................................................................................................12, 39, 40, 41
21 C.F.R. 1143.1 ...........................................................................................................................9
21 C.F.R. 1143.3 .........................................................................................................................11
21 C.F.R. 1143.5 ...................................................................................................9, 10, 24, 30, 33
Legislative and Administrative Materials
H.R. Rep. No. 111-58 (2009).........................................................................................................42
Proposed Rule, Deeming Tobacco Products to Be Subject to the Federal Food,

Drug, and Cosmetic Act, 79 Fed. Reg. 23,142 (Apr. 25, 2014) ........................6, 12, 16, 19, 21
Final Rule, Requirements for the Submission of Data Needed to Calculate User
Fees, 81 Fed. Reg. 28,707 (May 10, 2016)......................................................12, 13, 39, 40, 42
Final Rule, Deeming Tobacco Products to Be Subject to the Federal Food, Drug,
and Cosmetic Act, 81 Fed. Reg. 28,974
(May 10, 2016).....1, 2, 6, 7, 9, 11, 12, 13, 14, 19, 20, 21, 24, 30, 33, 34, 36, 40, 44, 45, 46, 48
Other Authorities
Component, Merriam-Webster, http://www.merriam-

webster.com/dictionary/component;........................................................................................47
New Websters Comprehensive Dictionary of the English Language 207 (1985

ed.) ...........................................................................................................................................47
- viii -
INTRODUCTION
In May 2016, the Food and Drug Administration (the FDA) regulated cigars and pipe
tobacco for the first time. See Final Rule, Deeming Tobacco Products To Be Subject to the
Federal Food, Drug, and Cosmetic Act, 81 Fed. Reg. 28,974 (May 10, 2016) (the Deeming
Rule). To do so, the FDA used a statutethe Family Smoking Prevention and Tobacco Control
Act (the TCA)that established an elaborate system for regulating cigarettes. See Pub. L. No.
11131, 123 Stat. 1776 (2009). The Act was entirely agnostic on whether and how cigars and
pipe tobacco should be regulated, leaving that issue to the agencys study.
Through the Deeming Rule, the agency foisted the entire cigarette regulatory apparatus,
virtually unaltered, onto cigars and pipe tobacco. The Rule required all cigarseven premium
cigars handmade as they have been for centuriesto navigate a devastatingly expensive FDA
review process. While this made sense for a cigarette market with fewer than 100 widely
marketed products, it spelled ruin for a cigar industry with endless variety and more than 20,000
different products. Each would have to run the FDA gauntlet, or be pulled from the market.
The current Administration recognized the folly of this exercise, delayed many aspects of
the Rule, and promised rulemaking dockets to adjust them. But the FDAs acknowledgement
that the Rule is deeply flawed did not go far enough. It left behindwith quickly approaching
compliance deadlinesfour unjustifiable aspects of the Rule. Each is contrary to established law.
First, the FDA required dramatically larger and more intrusive health warnings on cigar
and pipe tobacco packaging and advertisements, in plain violation of the First Amendment.
These warnings must cover 30 percent of the two most prominent panels of any package and 20
percent of any advertisement. The FDA also requires these warnings on virtually all
communications between local retailers and their customers. The FDAs new warnings cover up
to 475 percent more package space than the warnings long required by the Federal Trade
1
Commission (the FTC) for most of the cigar manufacturing industry. These warnings destroy
cigar boxes, through whose intricate artwork cigar manufacturers have long conveyed the
craftsmanship and quality of their products.
The Rules breathtaking confiscation of communication with consumers is a classic
restriction of commercial speech that fails any First Amendment standard. Here, the agency
never bothered, even for a moment, to explain how the existing warnings were failing. Instead, it
concluded that there was no reliable evidence that the bigger warnings would have any effect
on cigar or pipe tobacco use. The agency went forward nonetheless: Shooting first and asking
questions later never satisfies the First Amendment.
If that were not enough, the FDA barred anyonefrom the largest cigar company to the
cigar store around the cornerfrom advertising any cigar product until it has submitted a
warning plan and the FDA has approved it. Not to worry, the FDA says, it will probably get
back to anyone who wants to speak to consumers within twelve months, but no promises. This is
a prior restraint, and it is unconstitutional.
The Court should issue a preliminary injunction against the FDA warnings requirement.
Plaintiffs are incurring millions in costs to redesign packages and advertising, now, and those
costs will multiply each month until the August 10, 2018 compliance date. The cost of molding
speech to a requirement violates the First Amendment and is classic irreparable harm.
Second, the FDA mangled Congresss mandate that every industry regulated under the
TCA pay for its own regulation. In the Deeming Rule, the FDA chose to regulate cigars, pipe
tobacco, and e-cigarettes. Of those, it is charging only cigars and pipe tobacco, which in turn pay
for the cost of regulating e-cigarettes. The Act calls these user fees, but when all users of a
regulatory system do not pay, it is a tax. Nothing gives the FDA that power.
-2-
Third and fourth, the FDA crammed two square pegs into round holes, with devastating
consequences. It treated retailers who also blend two finished pipe tobacco products for a
customer as manufacturers, subject to crushing regulatory burdens. And it requires every
wooden pipe to go through FDA premarket review. Not one of the hundreds of individual pipe
craftsmen, nor many pipe tobacco retailers, will be able to run this gauntlet; centuries-old
traditions will die with no benefit to public health. Neither FDA interpretation, fortunately, can
be squared with the text of the Act.
BACKGROUND
I. THE CIGAR AND PIPE TOBACCO INDUSTRIES
Plaintiffs Cigar Association of America, Inc., International Premium Cigar and Pipe
Retailers Association, and Cigar Rights of America are non-profit associations that represent
many manufacturers, retailers, and consumers of cigars and pipe tobacco. Many of Plaintiffs
members are family-owned small businesses, and they have invested their lives and their
livelihoods in continuing the tradition of hand-crafting leaf tobacco into world-recognized cigars.
Plaintiffs therefore have a vital interest in ensuring that any regulation of cigars, pipes, and pipe
tobacco is consistent with statutory and constitutional requirements.
The cigar industry is a fraction of the size of the cigarette industry by production and
sales volume, and the premium segment is even smallerless than one percent. See AR 129595;
AR129899; AR130336. Unlike the cigarette industry, which is dominated by a handful of large
corporate manufacturers with billions in revenue, the cigar and pipe tobacco industries are
populated by small businesses making low-volume product lines. AR13033637; AR134763.
The process of crafting a premium cigar is slow and painstaking, the products unique to
the hands that form them. They are hardly innovative products; they have been made the same
way for centuries. Some manufacturers grow, harvest, and age the tobacco themselves; others
-3-
source the plant from farms the world over; all transform it into a rare artisanal good. See
AR129899. Whereas cigarettes roll off of mechanical assembly lines millions at a time,
premium cigars are largely made manually by skilled tradesmen from natural tobacco leaf.
AR12991516; AR159689. In fact, the process of manufacturing a premium cigar takes two to
five years or more, from the planting of the tobacco seed, to the harvest, to the cultivation of the
natural wrapper, to the rolling of the cigar. AR15975759.
Crop variations, the inherent imperfections that result from manual production, and
consumer demand for new, and often rare, cigars, have led to considerable diversity in the cigar
market, with more than 20,000 different products. AR130349; AR159690. Likewise, pipe
tobacco makers draw on their expert knowledge to constantly adjust tobacco blends, casings, and
flavorings to maintain a consistent sensory experience for their customers. AR130239. The
typical cigar consumer is an older adult who smokes infrequently and seeks out well known
makers and blends, as well as special editions and limited releases, much like a wine connoisseur
hunts for renowned vintages. AR129608; AR13033942.
II. CONGRESS ENACTS THE TOBACCO CONTROL ACT TO COMBAT

PRODUCT MANIPULATION AND MARKETING TO YOUTH
Congress passed the Family Smoking Prevention and Tobacco Control Act (the TCA)
in an effort to combat the manufacturer manipulation and youth use of cigarettes and smokeless
tobacco. See generally Pub. L. No. 11131, 123 Stat. 1776. 1 The TCA contains a lengthy
recitation of legislative findings focused on cigarettes and underage tobacco use. See TCA 2,
123 Stat. at 177681. The findings never mention cigars or pipe tobacco. See id. Congress
1
Citations to the TCA herein are limited to sections 16 of the Act (TCA 16), which were
not codified in the United States Code but can be found in the Statutes at Large (123 Stat. at
177683). Other citations are to the amended sections of the Food, Drug, and Cosmetic Act
(FD&C Act) (FD&C Act 901920) and the United States Code (21 U.S.C. 387387u).
-4-
mandated immediate regulation of only cigarettes, roll-your-own tobacco, and smokeless
tobacco. See FD&C Act 901(b), 21 U.S.C. 387a(b). The TCA also authorized the FDA to
deem other tobacco products by appropriate regulation. Id.
In the Act, Congress crafted a premarket review scheme for cigarettes and smokeless
tobacco. See id. 910, 21 U.S.C. 387j. Recognizing that the system would go into immediate
effect for cigarettes and smokeless tobacco, the Act required cigarette products that were not on the
market as of February 15, 2007 (the predicate date) to obtain FDA approval. See id. 910(a), 21
U.S.C. 387j(a). If a manufacturer could demonstrate to the FDA that a cigarette product was
substantially equivalent to one on the market as of the predicate date, the Act allowed the
manufacturer to bypass the full premarket review process and some of its many statutorily
mandated scientific inquiries. See id. 905(j), 910(a)(2)(A), 21 U.S.C. 387e(j), 387j(a)(2)(A).
In addition to the premarket review process, the TCA imposes other regulatory burdens
on cigarettes and smokeless tobacco. Among other things, the statute requires manufacturers:
(a) to submit lists of ingredients for each tobacco product; (b) to test each product for what the
FDA terms harmful or potentially harmful constituents and to provide those results to the
agency; (c) to submit documents relating to the health and toxicological effects of products,
ingredients, and additives to the FDA; (d) to register with the FDA and to undergo a biennial
inspection; and (e) to maintain extensive records and reports. Id. 904(a), 905(b)(d), (g),
909(a), 21 U.S.C. 387d(a), 387e(b)(d), (g), 387i(a).
The Act also authorizes, but does not require, the FDA to mandate warning labels on
tobacco products. Id. 906(d), 21 U.S.C. 387f(d). Understanding the implications on
commercial speech, Congress required weighty findings before the FDA could impose health
warnings on a tobacco product. Specifically, the FDA must study and determine the increased
-5-
or decreased likelihood that existing users of tobacco products will stop using such products and
the increased or decreased likelihood that those who do not use tobacco products will start using
such products. Id. 906(d)(1)(A)(B), 21 U.S.C. 387f(d)(1)(A)(B).
III. THE RULE SUBJECTS ALL CIGARS AND PIPE TOBACCO TO THE
CIGARETTE REGULATORY SCHEME
On May 10, 2016, the agency promulgated a Final Rule deeming all cigars, pipe tobacco,
and e-cigarettes subject to almost all of the regulatory scheme for cigarettes. See generally 81
Fed. Reg. at 28,97429,106.
A. The Premarket Review Process
The FDA began with transplanting the cigarette premarket review process and its
February 15, 2007 predicate date. Congress designed the 2007 date for a cigarette regulatory
scheme that began just two years after the predicate datein 2009. This decision destroyed the
substantial equivalence pathway to FDA approval that was absolutely indispensable for making
the process survivable for cigarettes. As the FDA recognized in the Proposed Rule, cigar
manufacturers may not be able to identify a viable predicate[,] because they would need to
reach back nine years before the predicate date. 79 Fed. Reg. 23,142, 23,176 (Apr. 25, 2014).
Even without the ill-suited predicate date, the premarket review process was already
poised to treat cigars and pipe tobacco far more harshly than cigarettes. Each productwhether
proceeding through substantial equivalence or notneeded to traverse a data-intensive and
expensive agency review process. That may have made sense for the cigarette industry, where
fewer than 100 cigarette products are meaningfully marketed in the United States. 2 But the cigar
2
The FDA has estimated that there are approximately 5,300 active UPCs for cigarettes and
smokeless tobacco and related products combined. AR01061819. But the four major cigarette
companies that account for more than 90 percent of U.S. cigarette sales actively market only ten
to twenty brands each. AR130336.
-6-
industry has more than 20,000 separate productsso-called stock-keeping units or SKUs.
AR130349; AR159690. That arises from the handmade manufacturing process and consumer
demand for different seed varietals, shapes, and blends. The cost of the FDA premarket review
process is directly proportional to the number of different products, but the agency never showed
that varied blends were dangerous. The comparatively crushing expense inevitably would have
led to product exit and business failure, along lines having nothing to do with public health.
Where the agency made changes to the cigarette regulatory scheme, it treated cigars and
pipe tobacco more harshly than the cigarette products that were the primary concern of Congress.
For example, Congress permitted cigarette and smokeless tobacco products to remain on the
market until the FDA resolved their substantial equivalence applications. FD&C Act
910(a)(2)(B), 21 U.S.C. 387j(a)(2)(B). The FDA forced cigar and pipe tobacco manufacturers
to pull those products after a year if the FDA had not gotten around to deciding their
applications. 81 Fed. Reg. at 29,011.
The arbitrary inequities of the Deeming Rule extend to pipe tobacco. The FDA defined
component or part in a way to require every traditional pipeoften crafted from wood by
handto pass through premarket review. Id. at 29,042. It did so with no analysis of their impact
on public health. See id. Likewise, the FDA concluded that retail establishments that blend
finished pipe tobacco for customers are tobacco product manufacturers and therefore must
comply with the burdensome premarket review, testing, registration, and other obligations imposed
on the actual manufacturing companies. See id. at 29,049.
-7-
B. The FDA Massively Increases the Size and Scope of Health Warnings on
Cigar Packages and Advertisements
1. The Existing Cigarette and Cigar Warning Regimes
The Rule next imposed a substantially more onerous health warnings regime on cigars
and pipe tobacco than what currently applies to cigarettes. Cigarette health warnings have been
in place since the 1965 Federal Cigarette Labeling and Advertising Act (FCLAA). The FDAs
attempt to require larger and more glaring warnings was struck down in R.J. Reynolds Tobacco
Co. v. FDA (R.J. Reynolds III), 696 F.3d 1205 (D.C. Cir. 2012). Under the current cigarette
warning system, one warning label appears on one side panel of a cigarette package, covering
only around 4.8 percent of the package. See 15 U.S.C. 1333(a)(1) (2008). Since 2012, the
FDA made no other attempt, but instead decided to massively increase the size of cigar warnings.
Most of the cigar industry is already subject to a Federal Trade Commission warnings
scheme. Under the FTC scheme, covered entities must display a series of five warning
statements clearly and conspicuously on their advertising and packaging. See, e.g., Decision
and Order at 3, In the Matter of Swedish Match N. Am., Inc., Docket No. C-3970 (F.T.C. Aug.
18, 2000), 2000 WL 1207446 (Ex. A). 3 The warning must appear on the principal display panel
of packages and must be printed in one of six sizes, depending on the size of the package. Id. at 5
6. On average, the FTC warnings cover roughly 13 to 15 percent of one package panel. See id.
2. The Expanded FDA Warnings
After virtually no study or analysis, the FDA decided dramatically to increase the size of
the cigar health warnings. The new package warnings must occupy at least 30 percent of the two
3
On June 26, 2000, seven leading cigar firms, comprising about 95 percent of the U.S. cigar
market at that time, agreed to the FTC settlement. See Press Release, Fed. Trade Commn, FTC
Announces Settlements Requiring Disclosure of Cigar Health Risks (June 26, 2000) (Ex. B).
Those manufacturers not covered by the FTC consent decree post warnings required by the State
of California on all of their U.S. packaging. AR021315.
-8-
principal display panelsthose most likely to be displayed, presented, shown, or examined by
the consumer. 21 C.F.R. 1143.1, 1143.5(a)(2). These warnings are approximately 195 to
237 percent larger on any one panel than the FTC warnings. When combined with the
requirement to cover two display panels, the FDA mandate covers approximately 390 to 475
percent more of the package surface area than the FTC cigar warnings, and substantially more of
the package surface area than the current warnings for cigarettes.
Warnings are also required on all cigars and pipe tobacco advertisements. Incredibly, the
FDA is requiring warnings on the advertisements of retailers, the small businesses that sell
cigars and pipe tobacco in local communities. See id. 1143.5(a), (b). The FDA extended
coverage to retailers, even though they would be selling and displaying packages bearing
warnings placed by the manufacturers.
The advertising warnings are huge. Cigar advertisements must display a warning
covering at least 20 percent of the area of the advertisement. 21 C.F.R. 1143.5(b). It must be
printed in at least 12-point font and be surrounded by a rectangular border between 3 and 4
millimeters wide. Id. 1143.5(b)(2). These requirements apply to any visual medium:
Newspaper ads, websites, social media, e-mails, billboards, pamphlets, catalogs, and direct
mailings are all covered. 4 If a retailer advertises on the radio, a warning must be read. See 81
Fed. Reg. at 29,064. In virtually all retail stores, six warning statements must be printed in at least
17-point font on a sign no smaller than 8.5 x 11 inches that is posted on or within 3 inches of each
cash register. 21 C.F.R. 1143.5(a)(3). This is the most valuable display space in any store.
4
The FDA says it may release guidance on how to place a warning on a website and presumably
social media, see 81 Fed. Reg. at 29,064, but has not yet done so. As explained below, how to
implement the 20 percent requirement on a website is not altogether clear.
-9-
The Rule requires rotation of the six cigar warning messages. Four of the warnings were
taken directly from the FTC scheme, one of the warnings was an alternative to a pregnancy-
related warning in the FTC decree, and the FDA added one new warning regarding nicotine:
(1) WARNING: Cigar smoking can cause cancers of the mouth and throat, even
if you do not inhale;
(2) WARNING: Cigar smoking can cause lung cancer and heart disease;
(3) WARNING: Cigar use while pregnant can harm you and your baby;
Or FTC scheme: SURGEON GENERAL WARNING: Tobacco Use
Increases the Risk of Infertility, Stillbirth, and Low Birth Weight;
(4) WARNING: Cigars are not a safe alternative to cigarettes;
(5) WARNING: Tobacco smoke increases the risk of lung cancer and heart
disease, even in nonsmokers; and
(6) WARNING: This product contains nicotine. Nicotine is an addictive chemical.
Compare id. 1143.5(a)(1), with Decision and Order at 3, Swedish Match. On packages, each of
the six warning statements must be randomly displayed in each 12-month period, in as equal
number of times as is possible on each brand of cigar sold in product packaging and be randomly
distributed in all areas of the United States in which the product is marketed. 21 C.F.R.
1143.5(c)(1). On advertisements, the warning statements must be rotated quarterly in
alternating sequence in each advertisement for each brand of cigar. Id. 1143.5(c)(2).
Each retailer or manufacturer must submit to the FDA a plan for rotating warnings twelve
months before advertising or commercially marketing a particular cigar brand. Id. 1143.5(c)(3).
Until the agency approves that warning plan, a manufacturer or retailer cannot sell or advertise its
products, on pain of FDA enforcement. See id. 1143.5(c); 81 Fed. Reg. at 29,07273. The Rule
contains no final deadline for agency action on warning plans. See 21 C.F.R. 1143.5(c).
Even after the FDA approves a cigar warning plan, manufacturers and retailers must submit
a supplement to the plan and await FDA review before making changes to the distribution,
display, or rotation of warnings. Ctr. for Tobacco Prods., Food & Drug Admin., Submission of
Warning Plans for Cigars: Guidance for Industry 7 (Dec. 2016) (Ex. C). New brands also require
- 10 -
new warning plans or supplements and waiting for FDA review before speaking about them. Id.
That means any change in the mode of advertising or the name of a product will silence
manufacturers and retailers again until the FDA has finished its second review. See id.
The Deeming Rule also imposes new warning requirements on pipe tobacco. 81 Fed.
Reg. at 29,060. Under the Rule, all pipe tobacco packages must bear the following warning
statement on the package label: WARNING: This product contains nicotine. Nicotine is an
addictive chemical. 21 C.F.R. 1143.3(a)(1). The warning must occupy at least 30 percent of
the two principal display panels and must be printed in at least 12-point font. Id. 1143.3(a)(2).
In advertisements, the warning must occupy at least 20 percent of the area of the advertisement
and must be printed in at least 12-point font. Id. 1143.3(b)(1)(2).
Congress required the FDA to analyze the effect of a warning on tobacco use before
imposing a new warnings requirement on any tobacco product. FD&C Act 906(d)(1), 21
U.S.C. 387f(d)(1). But stunningly, the FDA conceded that it did not have the scientific
research to determine the effect of larger warnings on cigar and pipe tobacco use, despite the fact
that the FTC warnings scheme was in place and available for study over the past sixteen years.
To quote the FDA: Reliable evidence on the impacts of warning labels . . . on users of cigars . . .
[and] pipe tobacco . . . does not, to our knowledge, exist. AR023973. The FDA instead
promised to conduct research and keep abreast of scientific developments regarding the efficacy
of the health warnings in the final rule and the ways in which their efficacy could be improved.
81 Fed. Reg. at 29,065.
C. The FDA Issues a Rule Imposing User Fees on Cigars and Pipe Tobacco, But
Not E-Cigarettes
The FDA simultaneously promulgated a separate rule that imposed user fees on some, but
not all, newly deemed products. See Final Rule, Requirements for the Submission of Data
- 11 -
Needed to Calculate User Fees, 81 Fed. Reg. 28,707 (May 10, 2016) (the User Fee Rule). To
fund the FDAs regulatory activities under the TCA, Congress required the FDA to charge so-
called user fees to the regulated entities. FD&C Act 919, 21 U.S.C. 387s. But when the
FDA sought to regulate cigars, pipe tobacco, and e-cigarettes, it charged user fees only to cigars
and pipe tobacco. 81 Fed. Reg. at 28,71012. For e-cigarettes, regulation was free. Id. The
result is that the cigar, pipe tobacco, cigarette, and smokeless tobacco industries are paying for
the regulation of e-cigarettes, upsetting the congressional mandate that industries subject to the
TCA (and by extension their citizen consumers) would pay for their own regulation.
IV. THE FDAS NEW REGULATORY APPROACH
From the day it proposed the Deeming Rule, the FDA knew that the cigarette regulatory
scheme would be ill-suited for cigar and pipe tobacco products. The FDA acknowledged that
different kinds of cigars (e.g., small cigars, cigarillos, large cigars, premium cigars) may have the
potential for varying effects on public health, if there are differences in their effects on youth
initiation, the frequency of their use by youth and young adults, and other factors. 79 Fed. Reg.
at 23,143. The agency also appeared to recognize that the costs of the regulatory scheme and the
massive health warnings would be particularly debilitating for premium, handmade cigars, with
little corresponding public health benefit. Thus, the agency sought comments on whether a class
of premium cigars should be exempted from regulation altogether, labeling this as so-called
Option 2. Id. at 23,150.
Despite receiving an overwhelming number of comments proving these issues were
serious problems, the FDA finalized a rule almost identical to the one it had proposed. No
exemption was made for premium cigar manufacturers. See generally 81 Fed. Reg. at 28,974
29,106. The agency never explained how running all types of cigars through the premarket
review process would advance the public health. Instead, it applied the entire cigarette scheme
- 12 -
and its absurdly ill-suited 2007 predicate date in rote fashion. See id. at 28,97681, 28,993. It
simply waved its hands at generalized public health concerns, claiming premium cigars were also
unhealthy. See id. at 29,020. As for warnings, the agency never explained why the longstanding
FTC warning scheme was not good enough. See id. at 29,06273.
Barely two months after the FDA finalized the Deeming Rule, Plaintiffs filed this
lawsuit. See Dkt. 1. Plaintiffs asserted nine claims under the Administrative Procedure Act and
the U.S. Constitution, challenging the agencys irrational actions with respect to the predicate
date and the substantial equivalence process, its arbitrary rejection of Option 2, its inequitable
user fee rule, its flawed costbenefit analysis, its unlawful warning label requirements, and its
countertextual regulation of tobacco blending and pipes. See id. On February 13, 2017,
Plaintiffs filed an exhaustive, 65-page motion for summary judgment on all claims. See Dkt. 22.
Rather than file a responsive brief in March 2017, the FDA sought extensions totaling six
months, Dkts. 26, 27, 34.
Then, on July 28, 2017, the FDA announced a new comprehensive plan for the
regulation of tobacco products, conceding that the focus of its regulatory efforts should be
combatting cigarette usethe public health problem that was the cornerstone of the TCA. 5 The
FDA acknowledged the Deeming Rules severe problems. The FDA extended the deadlines for
cigar and pipe manufacturers to submit product review applications 3 years, and provided that
manufacturers could continue to market their products while the agency reviews product
applications. See July 28 FDA News Release, at 2. In the meantime, the FDA said it would
5
See Press Release, FDA, FDA Announces Comprehensive Regulatory Plan to Shift Trajectory
of Tobacco-Related Disease, Death (July 28, 2017) at 1 (July 28 FDA News Release) (Ex. D).
Among other things, the FDA explained: A key piece of the FDAs approach is demonstrating
a greater awareness that nicotinewhile highly addictiveis delivered through products that
represent a continuum of risk and is most harmful when delivered through smoke particles in
combustible cigarettes. Id.
- 13 -
reopen a rulemaking docket for the appropriate regulatory treatment of premium cigars,
suggesting that its decision not to exempt premium cigars was unsupportable on the current
record. Id. For those cigars and pipe tobacco products that remain subject to regulation, the
agency committed to issue foundational rules to make the product review process more
efficient, predictable, and transparent for manufacturers, including outlining the information
required for substantial equivalence applications. Id. at 3.
The agencys announcement, however, does not go far enough to clean up the Deeming
Rule. The FDA left in place certain aspects of the Rule that inflict disproportionate burdens on
cigars and pipe tobacco and transgress clear legal limitations, to no good end. Chief among them
is the health warning requirement, which the agency has yet to justify with the reasoned decision-
making that is mandated by the First Amendment. The agency also stubbornly insists that small
business retailers who blend finished pipe tobacco should be regulated as manufacturers, and that
tobacco pipes crafted by small business artisans should be subject to premarket review by the
agency. And each quarter, it continues to exact unlawful user fees from cigar and pipe tobacco
manufacturers by taxing them with the costs of regulating e-cigarettes. The Court should finish
what the agency started and vacate these aspects of the flawed Deeming Rule scheme.
To this end, Plaintiffs have narrowed their motion to seek relief from the parts of the
Deeming Rule that impose near-term deadlines on Plaintiffs members. Plaintiffs will present
motions seeking relief from other aspects of the Rulenow with longer-term deadlinesshould
the agency not appropriately modify the Rule through its announced rulemaking dockets.
ARGUMENT
I. STANDARD OF REVIEW
Summary judgment under the Administrative Procedure Act serves as the mechanism for
deciding, as a matter of law, whether [an] agency action is supported by the administrative record
- 14 -
and otherwise consistent with the APA standard of review. All. for Nat. Health U.S. v. Sebelius,
775 F. Supp. 2d 114, 118 (D.D.C. 2011). The APA demands that a court hold unlawful and set
aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law. 5 U.S.C. 706(2)(A). In assessing agency
action under the APA, the Court must engage in a thorough, probing, in-depth review to
determine whether the agenc[y] ha[s] examine[d] the relevant data and articulate[d] a satisfactory
explanation for its action. Individual Reference Servs. Grp., Inc. v. FTC, 145 F. Supp. 2d 6, 25
(D.D.C. 2001). The court considers whether the agency acted within the scope of its legal
authority, whether the agency has explained its decision, whether the facts on which the agency
purports to have relied have some basis in the record, and whether the agency considered the
relevant factors. Id. Counsels post hoc rationalizations will not do; an agencys action must
be upheld, if at all, on the basis articulated by the agency itself. Motor Vehicle Mfrs. Assn of
U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 50 (1983).
When the constitutionality of an agencys action is challenged, the court must (like any
appellate tribunal) determine for itself whether the agency based its decision on the appropriate
constitutional standard. United Space All., LLC v. Solis, 824 F. Supp. 2d 68, 78 (D.D.C.
2011). The courts role is the same whether the suit proceeds under the APA or directly under
the Constitution. All. for Nat. Health U.S. v. Sebelius, 786 F. Supp. 2d 1, 12 n.10 (D.D.C. 2011).
[A] reviewing court owes no deference to the agencys pronouncement on a constitutional
question, and must instead make an independent assessment of a citizens claim of
constitutional right when reviewing agency decision-making. Poett v. United States, 657 F.
Supp. 2d 230, 241 (D.D.C. 2009). This sort of searching [i]ndependent judicial judgment is
especially appropriate in the First Amendment area. Id. The Court do[es] not accord [an
- 15 -
agency] deference when its regulations create serious constitutional difficulties. AFL-CIO v.
FEC, 333 F.3d 168, 175 (D.C. Cir. 2003).
The Court weighs four factors in deciding whether to preliminarily enjoin agency action:
(1) whether there is a substantial likelihood of success on the merits; (2) whether the movant will
suffer irreparable harm if the injunction is not granted; (3) whether the injunction will substantially
injure other parties; and (4) whether the public interest would be furthered by the injunction. R.J.
Reynolds Tobacco Co. v. FDA (R.J. Reynolds I), 823 F. Supp. 2d 36, 4243 (D.D.C. 2011).
II. THE FDAS WARNINGS VIOLATE THE FIRST AMENDMENT
The FDA warnings requirement violates the First Amendment in two ways. First, the
dramatically increased size of the new warnings unconstitutionally restricts speech by crowding
out manufacturer communication with consumers and violates any applicable standard for
government-compelled speech. Second, the warnings scheme is an unconstitutional prior
restraint on speech, as it requires manufacturers and retailers wishing to speak with consumers to
submit a warning rotation plan to the FDA in advance and wait for the FDAs approval.
A. The FDAs Larger and Broader Warnings Violate the First Amendment
For more than sixteen years, the majority of the cigar market has been required to display
health warnings on product packages and advertisements pursuant to a Federal Trade
Commission mandate. See 79 Fed. Reg. at 23,163. The FDA made these warnings dramatically
larger. They are required to cover 30 percent of the two display panels of any cigar package and
20 percent of any covered advertisement. That makes these warnings on even one package panel
roughly 195 to 237 percent larger than the FTC warnings, and the warnings drape two sides rather
than one side of the package. See Decl. of Rob Norris (Norris Decl.) 8 & Exs. BC. As such,
they cover roughly 390 to 475 percent more of the package surface area. The FDA is also
confiscating 20 percent of every cigar advertisementwhether from the corner cigar shop or the
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largest manufacturing companyfor its warning message. The warnings are required whatever
the mediumthe newspaper, an email to long-time retail customers, a website, or a radio adand
whoever the speakera manufacturer or corner cigar store. This dramatically expands the size and
scope of advertising warnings, in plain violation of the First Amendment. Manufacturers and
retailers used the space taken by these new warnings to speak with consumers, and now they cannot.
1. The FDAs Warnings Restrict Commercial Speech, and the Central

Hudson Test Applies
The First Amendment protects the messages manufacturers convey on cigar and pipe
tobacco packages, and the sheer size and scope of the FDA warnings mandate restricts that
speech. For centuries, cigars have been known by their distinctive, artistic, aesthetically pleasing
boxes. The designs, symbols, and trademarks on the packages send a message to consumers
about the qualities of the productstheir luxury and distinctionand the craftsmanship with
which they were assembled. AR130350; AR134770; Decl. of Rakesh Patel (Patel Decl.) 4
5. Cigar packages also communicate information about the productstheir country of origin,
seed varietal, process of manufacture, and other qualities.
Cigar and pipe tobacco packaging, like advertising about those products, is plainly a
medium of commercial speech protected by the First Amendment. See 44 Liquormart, Inc. v.
Rhode Island, 517 U.S. 484, 50408 (1996) (advertising ban prohibit[ing] truthful,
nonmisleading speech about a lawful product is subject to First Amendment scrutiny); Rubin v.
Coors Brewing Co., 514 U.S. 476, 48083 (1995) (First Amendment applies to information on
beer labels); Bad Frog Brewery, Inc. v. N.Y. State Liquor Auth., 134 F.3d 87, 9697 (2d Cir.
1998) (beer label that communicates no information beyond the source of the product is
protected as commercial speech). Constitutional protections apply with full force to speech
regarding tobacco products because, so long as the sale and use of tobacco is lawful for adults,
- 17 -
the tobacco industry has a protected interest in communicating information about its products
and adult customers have an interest in receiving that information. Lorillard Tobacco Co. v.
Reilly, 533 U.S. 525, 571 (2001).
The new warning labels will commandeer a significant amount of space on cigar and pipe
tobacco packaging, a dramatically larger scope of advertisements, and at the retail counter. This
is space manufacturers and retailers will be barred from using for their own speech, and the sheer
size and glaring format of these warnings guarantee that the governments message will be
dominate. This crowding out effect is a restriction of commercial speech, and thus the increase
of warning size must meet the standard established by the Supreme Court in Central Hudson Gas
& Electric Co. v. Public Service Commission of New York, 447 U.S. 557 (1980). See Dwyer v.
Cappell, 762 F.3d 275, 284 (3d Cir. 2014) (a disclosure requirement intended to make [speech]
so burdensome that speakers cease using a particular means of communication amounts to an
outright ban . . . properly analyzed under the Central Hudson standard of scrutiny); see also
Pursuing Am.s Greatness v. FEC, 831 F.3d 500, 507 & n.3 (D.C. Cir. 2016) (acknowledging that
a compelled disclosure could be so prominent to become a restriction of commercial speech).
2. The FDAs Warnings Fail the Central Hudson Test
The FDA has the burden of justifying a regulation restricting the space and prominence of a
companys communications with consumers. Edenfield v. Fane, 507 U.S. 761, 770 (1993). And
its burden is not light. R.J. Reynolds III, 696 F.3d at 1218. To uphold the Rule, the FDA must
prove that: (1) the asserted governmental interest is substantial; (2) the regulation directly advances
the governmental interest asserted; and (3) the regulation is not more extensive than is necessary to
serve that interest. Cent. Hudson, 447 U.S. at 566. Here, the FDA fails all three elements.
- 18 -
a. The FDAs warnings do not serve a substantial government

interest
The FDAs stated interest in the new labeling requirements is to help current and
potential tobacco users understand and appreciate the serious adverse health consequences
associated with tobacco use and the addictive nature of tobacco products. 79 Fed. Reg. at
23,163; see also id. at 23,165, 23,166; 81 Fed. Reg. at 28,981; AR023975. Standing alone, this
is not a substantial interest under Central Hudson.
The D.C. Circuit rejected the last FDA attempt to justify a tobacco warning requirement
through an interest in effectively communicating health information regarding the negative
effects of cigarettes. R.J. Reynolds III, 696 F.3d at 1221. 6 According to the Court, an interest
in effective communication is too vague to stand on its own, as it is merely a description of
the means by which [the FDA] plans to accomplish its goal of reducing smoking rates, and not
an independent interest capable of sustaining the Rule. Id. As the Supreme Court has further
explained, an effort to reduce adult use of a tobacco product cannot justify restrictions of speech:
The States interest in preventing underage tobacco use is substantial, and even
compelling, but it is no less true that the sale and use of tobacco products by
adults is a legal activity. We must consider that tobacco retailers and
manufacturers have an interest in conveying truthful information about their
products to adults, and adults have a corresponding interest in receiving truthful
information about tobacco products. . . . As the State protects children from
tobacco advertisements, tobacco manufacturers and retailers and their adult
consumers still have a protected interest in communication.
Lorillard Tobacco, 533 U.S. at 564 (citations omitted); see also R.J. Reynolds III, 696 F.3d at
1218 n.13 ([W]e are skeptical that the government can assert a substantial interest in discouraging
6
American Meat Institute overruled R.J. Reynolds to the limited extent that it may be read
as . . . limiting Zauderer to cases in which the government points to an interest in correcting
deception. Am. Meat Inst. v. U.S. Dept of Agric., 760 F.3d 18, 2223 (D.C. Cir. 2014) (en
banc). But R.J. Reynolds also analyzed the warnings under the Central Hudson test, and nothing
in American Meat touches the D.C. Circuits exposition of the Central Hudson factors, which
remains binding precedent.
- 19 -
consumers from purchasing a lawful product, even one that has been conclusively linked to
adverse health consequences . . . .). Instead, to satisfy Central Hudson, the FDA must
demonstrate how a restriction of speech will reduce youth use of tobacco products. Lorillard,
533 U.S. at 555. When the Government rests a rule restricting speech on simply improving
information, the judicial inquiry ends, and the rule is unconstitutional. See, e.g., Intl Dairy
Foods Assn v. Amestoy, 92 F.3d 67, 73 (2d Cir. 1996) (labeling law failed Central Hudson
because asserted interests in strong consumer interest and the publics right to know were
insufficient to justify compromising protected constitutional rights).
b. The FDAs warnings do not directly or materially advance the

reduction of underaged cigar and pipe tobacco use
After identifying a constitutionally irrelevant interest, the FDA predictably made no effort
to demonstrate whether and how the larger warnings would reduce underaged use. The agencys
burden is not satisfied by mere speculation or conjecture; rather, a government body seeking to
sustain a restriction on commercial speech must demonstrate that the harms it recites are real and
that its restriction will in fact alleviate them to a material degree. Rubin, 514 U.S. at 487
(quoting Edenfield, 507 U.S. at 77071). The agency has conceded, however, that [r]eliable
evidence on the impacts of warning labels . . . on users of cigars [and] pipe tobacco . . . does not, to
[the agencys] knowledge, exist and claims it needs to study the issue. AR023973; 81 Fed. Reg.
at 29,065. This is a problem: Central Hudson requires FDA to find and present data supporting
its claims prior to imposing a burden on commercial speech. R.J. Reynolds III, 696 F.3d at 1221.
And the FDA cannot get around the First Amendment by pleading incompetence or futility. Id.
The evidence in the record simply does not indicate a regulatory problem with respect to
underaged use of cigars or pipe tobacco, much less one that the warning labels would begin to
solve. As an initial matter, underaged use simply is not the same issue for cigars, particularly
- 20 -
premium cigars, as it is for cigarettes. See Decl. of Cecil R. Reynolds, Ph.D. (Reynolds Decl.)
2548; Supplemental Decl. of Cecil R. Reynolds, Ph.D. (Reynolds Supp. Decl.) 311.
Only a small percentage (2.5%) of the underaged reported using cigar productsand even fewer
for premium cigarsand these numbers have been decreasing over time. Reynolds Decl. 25
27, 29, 39, 4446; Reynolds Supp. Decl. 11. Indeed, a recent FDA-funded study reported no
statistically significant use of premium cigars by the underaged. Reynolds Decl. 2526. The
agency made no specific findings regarding underaged pipe tobacco use in the Final Rule and
ignored a study reporting youth usage rates of 0.2%. 81 Fed. Reg. at 29,04849. Nor have there
been congressional findings that cigar or pipe tobacco manufacturers are targeting their
marketing or advertising at the underaged or manipulating their products to appeal to the
underaged. Compare TCA 2(47)(49), 123 Stat. at 1781 (findings on cigarette industry).
The FDAs tepid reliance on studies of cigarette use is also not enough to justify broad
speech restrictions on cigars and pipe tobacco, which have dramatically different usage patterns.
See 79 Fed. Reg. at 23,16465 (discussing cigarette studies); 81 Fed. Reg. at 29,064 (same);
Reynolds Decl. 72. Even if such studies were relevant, they show that health warnings do not
materially affect the causes of underaged smoking. See Reynolds Decl. 7180; Reynolds
Supp. Decl. 12. The causes of underaged smoking are peer pressure, modeling, and underaged
access and availability. See Reynolds Decl. 5470. The record does not include, and
Plaintiffs expert has not found, evidence that underawareness of the health risks of smoking is a
cause for underaged use. The agencyjust like in R.J. Reynoldsdid not present data showing
that better communication of health risks will reduce smoking among the underaged, a
population that regrettably feels invincible no matter what they are told. See id. 59. Absent
such evidence, the rule cannot stand, as [a] restriction that provides only ineffective or remote
- 21 -
support for the governments purposes is not sufficient. R.J. Reynolds III, 696 F.3d at 1218
19; see also Natl Assn of Mfrs. v. SEC, 800 F.3d 518, 527 (D.C. Cir. 2015).
c. The FDAs warnings are not narrowly tailored
The FDA fails both aspects of the narrowly tailored requirement. Narrow tailoring
requires a reasonable fit between the means and ends of the regulatory scheme. Lorillard
Tobacco, 533 U.S. at 561. In addition, the FDA must show that there are no other options
available that could advance [its] asserted interest in a manner less intrusive to [Plaintiffs] First
Amendment rights. Rubin, 514 U.S. at 491. The government cannot satisfy that standard if it
presents no evidence that less restrictive means would fail. Natl Assn of Mfrs. v. SEC, 748
F.3d 359, 372 (D.C. Cir. 2014), overruled on other grounds by Am. Meat Inst., 760 F.3d 18, and
adhered to on panel rehg, 800 F.3d 518.
(1) The massive warnings do not reasonably fit any

substantial government objective
First, there is no reasonable fit between the required warnings and the FDAs stated
goals. The warnings commandeer a significant portion of a products packaging and advertising,
occupying 30 percent of the products two principal displays and 20 percent of any advertising.
Court after court has struck down such large warnings as just too big. Cf. Entmt Software Assn
v. Blagojevich, 469 F.3d 641, 652 (7th Cir. 2006) (finding that a four-square-inch warning label
to be placed on a 7.5-by-5.5-inch DVD boxcovering 39 percent of just one panelliterally
fails to be narrowly tailored [because] the sticker covers a substantial portion of the box). Just
last month, the Ninth Circuit held that a San Francisco mandated health warning covering just 20
percent of advertisements of beverages with added sugar was unduly burdensome under the more
relaxed Zauderer standard. Am. Beverage Assn v. City & Cty. of S.F., --- F.3d ----, 2017 WL
4126944, at *8 (9th Cir. Sept. 19, 2017).
- 22 -
The burdens of the warnings are massive, and the FDA did not carefully calculate[] the
costs and benefits associated with the burden on speech. Greater New Orleans Broad. Assn,
Inc. v. United States, 527 U.S. 173, 188 (1999); see also Lorillard, 533 U.S. at 56465. With
regard to the package component of the warnings, many manufacturers rely on their ornate
packaging as a significant way to differentiate their products at the point of sale. See Patel Decl.
4; Decl. of Robert Brady (Brady Decl.) 6; Decl. of Nadia Trowbridge (Trowbridge Decl.)
7. This is particularly important in the premium cigar industrywhere customers are often not
brand-loyal and regularly look for new products such that packaging is a means of brand
competition. See AR129897. The warnings nearly destroy this medium: The intricate artwork,
world-recognized trademarks, and message of careful craftsmanship is almost entirely obscured by
the warnings covering 30 percent of two main panels, as is apparent in the exhibits to the
declarations of Plaintiffs members. Patel Decl. Ex. A; Brady Decl. Ex. A; Trowbridge Decl. Exs.
AC. Even when packages are redesigned so there is blank space for the warnings and artwork is
not covered, manufacturers will be in a losing battle with the Governments message in large black
text over a stark white background. The Governments message will dominate, forever
compromising manufacturer communication with customers.
The FDA warnings are also far more expensive to administer than the FTC warnings.
Because the FDA warnings are defined in terms of their percent coverage of a given packages
display area, rather than having set dimensions, cigar manufacturers will be forced to design and
print countless new labels to fit each distinctive package. Norris Decl. 67, 16.
The agency also made no effort to justify the extraordinary burdens of the advertising
warnings. As an initial matter, the FDA extended the warnings beyond manufacturers to retailer
advertising. The corner cigar storewhose advertisements never before have required warnings
- 23 -
must display or recite the warnings in virtually every communication with customers, whether sent
by electronic or U.S. mail, published in the newspaper, posted online, placed on social media,
spoken on the radio, or broadcast on television. 81 Fed. Reg. at 29,064. The FDA imposed all
these requirements on retailer speech, even though the packages customers come to see and buy
will bear health warnings. Even the retailers of cigarettes, the products at the heart of the TCA, are
not subject to such burdensome and obtrusive warning requirements. See 15 U.S.C. 1333.
Take retailer websites: They announce store hours and special offers on the cigar of the
month. They will be marred by warnings covering at least 20 percent of the first screen and
perhaps more if the reader can scroll down. Decl. of John Anderson (Anderson Decl.) 9 &
Ex. A. Cramming a warning into a Twitter or Instagram post leaves little room for anything else.
See id. 1012 & Exs. AB. Many retailers purchase expensive 15-second radio spots during
peak hours. Decl. of George Koebel (Koebel Decl.) 6. Up to 7 seconds will be for reading a
warning. Id. 7; see Tillman v. Miller, 133 F.3d 1402, 1404 & n.4 (11th Cir. 1998) (requirement
that five seconds of a 30-second television ad be reserved for a disclaimer violated Zauderer).
Retailers say they will abandon these media if forced to display warnings. Koebel Decl. 7;
Anderson Decl. 13. That is hallmark of an unconstitutional speech restriction. See Am.
Beverage Assn, 2017 WL 4126944, at *8.
On top of all this, retailers must print all six of the cigar health warnings on a sign no
smaller than 8.5 x 11 inches that is posted on or within 3 inches of each cash register. 21 C.F.R.
1143.5(a)(3). This is the most valuable display space in any store, and retailers will lose it to
these signs, which bear only the governments message. Many may be forced to move their
registers and reconfigure their stores to comply with the Rule. All of these compliance costs
- 24 -
come crashing down not on large corporate conglomerates with in-house legal departments, but
on sole proprietorships with a dozen employees.
Manufacturer advertising will be similarly burdened. Cigar manufacturers will have to
remove, discard, and replace point-of-sale advertisementssigns, clocks, and shelf-talkers,
which describe the product for salebecause they all must bear the new warnings. Patel Decl.
1013 & Ex. B. This will cost the industry tens of millions. Id. Retailers and manufacturers alike
will seek but fail to compete with the Governments glaring black-on-white message, covering a
fifth of all advertising, in addition to shrouding every box in the store. The regime, and its
duplicative requirements, will turn every retail humidor into a museum of Government speech.
Hardly the reasonable fit between costs and public health benefits required by the First
Amendment, the FDA concedes there is nothing to be gained through its new warnings. It bears
repeating: The agency says there is no [r]eliable scientific evidence that the new warnings will
reduce tobacco use. AR023973.
(2) The FDA ignored alternatives less restrictive of speech
Second, the FDA rode roughshod over an obvious less restrictive alternative: The FTC
warnings regime that was already in place. The FDA warnings are approximately 195 to 237
percent larger than the FTC warnings, which cover just one panel of the box. See Norris Decl.
8 & Exs. BC. When the FDA requirement of covering the two principal panels is considered,
the FDA warnings cover up to 475 percent more space that manufacturers currently use to speak
with consumers. See id. 68 & Ex. C. As important, much of the industry has molded its
speech around the FTC warnings over the last 16 years; the change in size mandated by the FDA
and the shrouding of that trade dress is infinitely more disruptive to speech and will require
extensive and expensive product redesign across the industry. See id. 316. The advertising
warnings too have been enlarged. On manufacturer advertising, they are approximately 250 to
- 25 -
500 percent larger. The FDA mandate also vacuums advertising by the smallest of businesses
cigar and pipe tobacco retail storesinto the burdens of warnings. That is even though the
retailers will be selling products with health warnings affixed.
The FDA, however, spent not even a drop of ink analyzing whether to adopt the FTC size
and scope alternative. See U.S. West, Inc. v. FCC, 182 F.3d 1224, 123839 (10th Cir. 1999)
(agencys failure to adequately consider an obvious and substantially less restrictive alternative
indicated that it did not narrowly tailor its regulations). The agency did nothing whatsoever to
demonstrate that the FTC warnings were failing to inform consumers about the health effects of
smoking, much less that they were ineffective in reducing the use of tobacco products. The FTC
warnings were not some theoretical alternative measure, whose effects on human behavior would
be difficult to study. The agency had the entire Nation as an open laboratory for the last sixteen
years, and it could have tested whether the existing warnings scheme falls short of the
governments requirements. But the agency concluded that there was no [r]eliable evidence on
the effect of warnings on the use of tobacco. AR023973. That is a problem of the agencys own
making or, in this case, inaction. One would expect from a scientific agency, or any government
entity seeking to restrict speech, some serious analysis about how an existing warnings scheme
with nearly identical substance is failing to inform consumers and how an adjustment will solve
that problem. Recitation of an aphorismbigger is betteris not good enough to satisfy the
First Amendment.
In any event, the existing warnings are only one of many alternatives less restrictive of
speech. The government could disseminate its anti-smoking message itself through
government advertising and public information campaigns. R.J. Reynolds Tobacco Co. v. FDA
(R.J. Reynolds II), 845 F. Supp. 2d 266, 276 (D.D.C. 2012), affd on other grounds, 696 F.3d
- 26 -
1205 (D.C. Cir. 2012), overruled on other grounds by Am. Meat Inst., 760 F.3d 18. There are
numerous other established methods that are more likely than larger health warnings to reduce
underage tobacco use: Raising the minimum legal age to purchase tobacco products; increasing
penalties and enforcement measures relating to sales of tobacco to, or possession or use of
tobacco by, the underaged; increasing support for programs aimed at the social factors
underlying tobacco use by the underaged; and raising the prices of tobacco products. See
Reynolds Decl. 8183; Reynolds Supp. Decl. 10. All of these measures are directed at the
root causes of underaged tobacco use and involve no restriction of speech. None was analyzed
by the FDA and demonstrated to be inadequate. After all, regulating speech must be a lastnot
firstresort. Thompson v. W. States Med. Ctr., 535 U.S. 357, 373 (2002).
The FDAs warnings severely restrict the commercial speech of cigar manufacturers and
retailers, and the agency has not carried its burden on any of the Central Hudson factors. The
FDAs warnings violate the First Amendment.
B. The FDAs Warnings Also Fail the Standard for Compelled Commercial
Disclosures
Because the warnings confiscate so much of a cigar or pipe tobacco advertisement or
package space, they crowd out manufacturer and retailer communication with consumers and
should be analyzed as restrictions on commercial speech under Central Hudson. Whether or not
Central Hudson applies, the FDA warnings also fail the Supreme Courts standard for applying
the First Amendment to routine commercial disclosures under Zauderer v. Office of Disciplinary
Counsel of the Supreme Court of Ohio, 471 U.S. 626 (1985). Under Zauderer, even purely
factual and uncontroversial disclosures violate the First Amendment if they are unjustified or
unduly burdensome. 471 U.S. at 651. That is, notwithstanding its more lenient standards,
Zauderer cannot justify a disclosure so burdensome that it essentially operates as a restriction
- 27 -
on constitutionally protected speech, . . . [n]or can it sustain mandates that chill[] protected
commercial speech. Am. Meat Inst., 760 F.3d at 27.
First, there has been no charge of consumer deception by cigar or pipe tobacco
manufacturers that the FDA warnings are required to correct. Because the FDA did not bother to
show a pattern of consumer deception, it is not entitled to rely on the Zauderer standard. See 471
U.S. at 651; see also Milavetz, Gallop & Milavetz, P.A. v. United States, 559 U.S. 229, 25053
(2010) (describing Zauderers roots in disclosures intended to combat consumer deception). 7
Second, the new and substantially larger warning labels are unjustified insofar as they
do not advance a substantial government interest. The D.C. Circuit has questioned whether
Zauderer would permit government reliance on interests that do not qualify as substantial under
Central Hudsons standard. Am. Meat, 760 F.3d at 23. The only circuit to have fully answered
the question has said no. CTIA-The Wireless Assn v. City of Berkeley, Cal., 854 F.3d 1105,
1117 (9th Cir. 2017) (Central Hudson explicitly requires that a substantial interest be furthered
by a challenged regulation prohibiting or restricting commercial speech, and we see nothing in
Zauderer that would allow a lesser interest to justify compelled commercial speech.). The
FDAs stated interest in increasing understanding of the health risks of cigar and pipe tobacco
products is not a constitutionally recognized substantial interest, and the agency has made no
effort to show that the larger warnings will reduce underaged cigar or pipe tobacco use. See
supra Sections II.A.2.aA.2.b; see also Intl Dairy Foods Assn, 92 F.3d at 74 ([C]onsumer
7
Plaintiffs understand that the D.C. Circuit has taken a different view than the Seventh and
Tenth Circuits, but preserve this issue for further appellate review. Compare Am. Meat, 760 F.3d
at 2223, with Entmt Software Assn, 469 F.3d at 652 (reading Zauderer as limited to
disclosures that are reasonably related to the States interest in preventing deception of
consumers), and United States v. Wenger, 427 F.3d 840, 849 (10th Cir. 2005) (same).
- 28 -
curiosity alone is not a strong enough state interest to sustain the compulsion of even an accurate,
factual statement in a commercial context.).
Third, the labels are unduly burdensome because they are too large. See Zauderer, 471
U.S. at 651. The warning labels confiscate 30 percent of two sides of packages, 20 percent of
visual advertisements, and a significant share of audio advertisements, where manufacturers would
otherwise communicate the qualities of their products. See, e.g., Koebel Decl. 4, 6 & Exs. A
C; Trowbridge Decl. 4 & Exs. AC. The Ninth Circuits decision in American Beverage
Association is completely on point. There, San Francisco had required health warnings covering
20 percent of all advertisements of beverages with added sugar. Am. Beverage Assn, 2017 WL
4126944, at *2. That is the exact same percentage as the FDA is requiring on cigar and pipe
tobacco advertisements, and less than the 30 percent of the two principal panels that the FDA is
requiring for packages. The court held that a warning covering 20 percent of an advertisement was
too large because it overwhelms other visual elements in the advertisement. Id. at *8.
In so doing, the Ninth Circuit followed a long tradition of striking down mandated
disclosures that take up too much space and are too prominent a part of the advertisement or
package. Id.; Dwyer, 762 F.3d at 284 (advertising rule requiring publication of complete court
opinions rather than excerpts is so cumbersome that it effectively nullifies the advertisement);
Pub. Citizen Inc. v. La. Attorney Disciplinary Bd., 632 F.3d 212, 228 (5th Cir. 2011) (striking
down requirement of disclosure in font size that is so large that an advertisement can no longer
convey its message); Tillman, 133 F.3d at 1404 & n.4 (striking down as unduly burdensome
requirement that five seconds of a 30-second television ador 17 percentbe reserved for a
disclaimer); see also Ibanez v. Fla. Dept of Bus. & Profl Regulation, Bd. of Accountancy, 512
U.S. 136, 14647 (1994) (disclosure requirement that effectively foreclosed certain
- 29 -
advertisements was unduly burdensome). There is not a glimmer of daylight between the San
Francisco ordinance and the FDA rule. Both are health warning requirements; both take up too
large a percentage of the medium; both are unconstitutional. 8
In sum, the warning requirements fail to satisfy First Amendment scrutiny under either a
Zauderer or a Central Hudson analysis.
C. The FDAs Warning Plan Pre-Approval Requirement Violates the First

Amendment
The Rule also silences a retailer or manufacturer who wishes to speak to consumers for
twelve months or more while the FDA considers its plan to comply with the mechanical task of
rotating warning statements. The plan must be submitted twelve months before communicating
with consumers through a package or advertising, and the FDA makes no promise to approve the
plan in that time. See 21 C.F.R. 1143.5(c)(3); 81 Fed. Reg. at 29,07273. Until the agency
approves that warning plan, a manufacturer or retailer cannot speak about its products. See 81
Fed. Reg. at 29,07273.
1. The Warning Plan Scheme Is an Unconstitutional Prior Restraint
The warning plan system is a wholly unjustified prior restraint of commercial speech and
violates the First Amendment. Regulations requiring advance government approval of speech
amount to prior restraints and bear a heavy presumption of unconstitutionality. FW/PBS, Inc. v.
City of Dall., 493 U.S. 215, 225 (1990). Most courts have declined to carve out commercial
8
The Sixth Circuits resolution in Discount Tobacco City & Lottery, Inc. v. United States, 674
F.3d 509 (6th Cir. 2012), is not the salvation the FDA claims. See 81 Fed. Reg. at 28,988.
Under consideration there was the TCAs directive that cigarettes bear graphic warnings to be
chosen by the FDA. Discount Tobacco, 674 F.3d at 55253. The Sixth Circuit confronted a
facial challenge to the statute, not to any FDA rule actually requiring warnings, and evaluated the
issue against alleged decades of deception by cigarette companies about the risks and
addictiveness of cigarette smoking. See id. at 56263. Neither circumstance applies here:
Plaintiffs challenge the Deeming Rule, not the TCA, and there have been no similar findings of
deception in the case of cigar manufacturers.
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speech, as prior restraints are particularly abhorrent to the First Amendment, and the
requirement of procedural safeguards in a system of prior restraints should not be loosened even
in the context of commercial speech. N.Y. Magazine v. Metro. Transp. Auth., 136 F.3d 123, 131
(2d Cir. 1988); see also Desert Outdoor Adver., Inc. v. City of Moreno Valley, 103 F.3d 814, 818
(9th Cir. 1996); In re Search of Kittys E., 905 F.2d 1367, 1371 (10th Cir. 1990).
The FDAs pre-approval and waiting period system fails every requirement for prior
restraints of commercial speech. First, there is no reasonmuch less a compelling onewhy
speaking to the marketplace should wait for twelve months or longer while the FDA considers a
plan for the rotation of the six mandated messages. See Burk v. Augusta-Richmond Cty., 365
F.3d 1247, 1251 (11th Cir. 2004) (Prior restraints are presumptively unconstitutional and face
strict scrutiny.); Rosen v. Port of Portland, 641 F.2d 1243, 1250 (9th Cir. 1981) (prior restraints
are permitted only when the infringement is minimal and there is a compelling governmental
interest which cannot be protected by any other means). This is not an issue of stopping
packaging or advertisements of cigars and pipe tobacco without a health warning. The only issue
the pre-approval and waiting period process addresses is whether the six approved warnings are
rotated with the frequency the FDA prefers. If a retailer or manufacturers plan implements
rotation incorrectly, the FDA can detect the error and seek its correction while the speech is
underway. There is absolutely no serious public health reason why the agency cannot address
deficiencies in warning rotation while the speech is occurring.
Second, there is no time limit on FDA consideration. The waiting period to speak is thus
indefinite, and that is per se unconstitutional. See FW/PBS, 493 U.S. at 226 ([A] prior restraint
that fails to place limits on the time within which the decisionmaker must [act] is impermissible.);
Riley v. Natl Fedn of the Blind of N.C., Inc., 487 U.S. 781, 802 (1988) (licensing scheme
- 31 -
unconstitutional because [t]he statute on its face does not purport to require when a determination
must be made, nor is there an administrative regulation or interpretation doing so); Se. Promotions
Ltd. v. Conrad, 420 U.S. 546, 560 (1975) (any restraint prior to judicial review can be imposed
only for a specified brief period and only for the purpose of preserving the status quo, and a
prompt final judicial determination must be assured); Nutritional Health All. v. Shalala, 144 F.3d
220, 228 (2d Cir. 1998) (the absence of a final deadline for agency action renders prior restraint
unconstitutional). The Rule requires submission of a warning plan twelve months before speaking,
but even then, the speaker needs to wait for FDA approval of the plan, however long it takes. That
is not some remote possibility, given the staggering number of cigar brands and the FDAs
historical difficulty timely reviewing tobacco product submissions.
Even if a year were the target, courts have rejected shorter waiting periods designed to
prevent serious harms. See 11126 Baltimore Blvd., Inc. v. Prince Georges Cty., 58 F.3d 988,
100001 (4th Cir. 1995) (citing cases), abrogated on other grounds by City of Littleton v. Z.J.
Gifts D-4, L.L.C., 541 U.S. 774 (2004). Whether WARNING: Cigar smoking can cause lung
cancer and heart disease is swapped out quickly enough for WARNING: Cigars are not a safe
alternative to cigarettes is not even close to justifying a year-long waiting period.
2. The Warning Plan Scheme Is an Unconstitutional Restriction of Speech
Under the FDA scheme, a retailer who one day wishes to announce to the public that he
has a particular cigar for sale at a particular price must wait twelve months to do so. The
warning plan scheme restricts the essence of commercial speechwho is producing and selling
what product, for what reason, and at what price. Va. State Bd. of Pharmacy v. Va. Citizens
Consumer Prot. Council, 425 U.S. 748, 765 (1976); see also 44 Liquormart, 517 U.S. at 495
504. It must satisfy Central Hudson but does not.
- 32 -
The warning plan gag order does not directly advance any substantial governmental
interest. Here, the FDA would need to show that not just warnings, but the FDAs advance
ability to fine tune their rotation, will reduce underaged tobacco use. But the FDA has done
nothing of the kind. See Intl Dairy Foods Assn, 92 F.3d at 73.
Nor has the FDA demonstrated any reasonable fit between means and ends. Lorillard
Tobacco, 533 U.S. at 561. The FDA says the warning plan regime is designed to ensure that the
different warnings reach[] as many individuals as possible and do not grow stale from
overuse if repeated too many times for the same individual, 81 Fed. Reg. at 29,072. But that is
an argument for warning rotation, not for gagging speech while the FDA ponders a plan to rotate
warnings in advance of speaking. Said another way, the FDA has not explained why it cannot
ensure sufficient rotation by enforcement and counseling while speech is occurring. After all,
compliance with warning rotation is not that difficult to understand. The Rule lays out the rotation
requirement in excruciating detail. See 21 C.F.R. 1143.5(a)(1)(3), (b)(1)(2), (c)(1)(2).
Under any standard, the warning plan regime offends the First Amendment.
III. THE FDAS WARNINGS VIOLATE THE TOBACCO CONTROL ACT AND
THE ADMINISTRATIVE PROCEDURE ACT
Although the record conclusively demonstrates the unconstitutionality of the FDAs new
warning scheme, the Court need not reach the constitutional question because the warning
mandate also violates the TCA and the APA.
A. The Tobacco Control Act Requires Agency Findings on How Warnings Will
Affect Tobacco Use
Congress sought to prevent violations of the First Amendment. So it barred any advertising
regulations not consistent with the First Amendment. FD&C Act 906(d)(1), 21 U.S.C.
387f(d)(1). And it required the Secretary of HHS to make findings on the effect of a regulation
such as one requiring health warnings, based on (A) the increased or decreased likelihood that
- 33 -
existing users of tobacco products will stop using such products; and (B) the increased or decreased
likelihood that those who do not use tobacco products will start using such products. Id.
The FDA made no determination at all about the warnings effect on decreasing cigar or
pipe tobacco use. Instead, the agency simply asserted that the warning labels would help
consumers appreciate the risks of cigars and pipe tobacco. E.g., 81 Fed. Reg. at 29,064,
29,065, 29,070, 29,075. But that is not the inquiry Congress required. It required findings on the
likelihood of reducing cigar and pipe tobacco use. Stunningly, the FDA admitted it could not
make the statutorily mandated finding: Reliable evidence on the impacts of warning labels . . .
on users of cigars . . . [and] pipe tobacco . . . does not, to our knowledge, exist. AR023973
(emphasis added). It said it would have to study the issue in the future. See 81 Fed. Reg. at
29,065 (the agency intends to conduct research and keep abreast of scientific developments
regarding the efficacy of the health warnings in the final rule and the ways in which their
efficacy could be improved). The statute requires findings on the increased or decreased
likelihood of smoking initiation or cessation before warnings are imposed, not after. FD&C
Act 906(d)(1), 21 U.S.C. 387f(d)(1).
Congress was wise to require explicit agency findings that warning labels would reduce
tobacco use. That is because the Constitution requires the same evidence before the government
restricts speech. See supra Section II.A.2.b. If there were any ambiguity about the rigor of
findings the TCA requires before the FDA imposes a warning mandate, the Court should demand
that the agency find specifically and with evidence that the warnings would reduce tobacco use,
particularly youth tobacco use, so as to avoid the serious constitutional problems that otherwise
would result. See Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Constr. Trades
Council, 485 U.S. 568, 575 (1988) ([W]here an otherwise acceptable construction of a statute
- 34 -
would raise serious constitutional problems, the Court will construe the statute to avoid such
problems unless such construction is plainly contrary to the intent of Congress.).
B. The Rule Is Arbitrary and Capricious Because the FDA Ignored Statutorily
Required Considerations and Inverted Its Own Risk Assessment
In any event, the statutory mandate to specifically determine whether and how the
warnings mandate would reduce tobacco use demonstrates that the rule is arbitrary and
capricious in violation of the APA:
When Congress says a factor is mandatory, that expresses its judgment that such a
factor is important. In accordance with this principle, we have held that the
complete absen[c]e of any discussion of a statutorily mandated factor leaves us
with no alternative but to conclude that [the agency] failed to take account of this
statutory limit on [its] authority, making the agencys reasoning arbitrary and
capricious.
Pub. Citizen v. FMCSA, 374 F.3d 1209, 1216 (D.C. Cir. 2004); see Motor Vehicle Mfrs. Assn of
U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 4243 (1983). The agency conceded
that it did not and could not reach an issue Congress made important. The rule is by definition
arbitrary and capricious.
Further, the agency arbitrarily accepted massive costs without identifying corresponding
benefits. See State Farm, 463 U.S. at 43; Del. Dept of Natural Res. & Envtl. Control v. EPA,
785 F.3d 1, 1618 (D.C. Cir. 2015). Each product label will undergo what the FDA terms a
major change, the labeling requirements are a large contributor to the costs of this rule, and
the costs are astronomical. AR023952, AR024017, AR024019. For example, one premium
cigar manufacturer has 1,670 unique products. AR13028586. Under the FDAs own
calculation of the cost for a warning change, this manufacturer will need to spend between
$2,571,800 and $27,820,530. See AR024019.
Again, the agency did not show how the new warnings would cause reductions in tobacco
use, much less as against the dramatically less costly alternative of adopting the FTC warning
- 35 -
scheme already in place for much of the industry. The failure to consider this obvious alternative
renders the scheme arbitrary and capricious. See State Farm, 463 U.S. at 48. 9
The warning scheme is also internally inconsistent with the agencys own findings,
rendering it arbitrary and capricious. See Dist. Hosp. Partners, L.P. v. Burwell, 786 F.3d 46, 59
(D.C. Cir. 2015) (inconsistent reasoning violates the APA). The cigar warnings are more severe
than those for cigarettes. See 15 U.S.C. 1333. They cover a considerably greater portion of
packages and advertisements, and they apply to nearly everything said about cigars and pipe
tobacco by retailers, where cigarette warnings are not required of retailers at all. But the agency
has determined that cigarettes are at the most dangerous end of the risk continuum. FDA News
Release at 1 (nicotine is most harmful when delivered through . . . cigarettes). Skipping
directly to dramatically larger and broader cigar warnings, while leaving cigarette warnings
untouched in the five years since the D.C. Circuit struck down the agencys prior effort and the
three years since the agency proposed the cigar warnings, is irreconcilable with the agencys own
conclusions and arbitrary in violation of the APA. 10
9
The agencys failure to seriously analyze the efficacy of larger warnings dovetails with the
agencys disregard for the alternative of waiting for the study and research Congress required
from the Tobacco Products Scientific Advisory Committee (the TPSAC or the Committee).
FD&C Act 917(c), 21 U.S.C. 387q(c). Citing First Amendment concerns, at least one
commenter suggested that the FDA defer imposing the warning label requirements on newly
deemed products until the FDA or the Committee could complete scientific research, taking into
account the distinctive usage patterns among different tobacco products. AR16063839.
10
Various other labeling requirements were imposed as part of the Deeming Rule. See FD&C
Act 903(a)(2), (a)(4). These requirements have the same compliance date as the health
warning requirements. 81 Fed. Reg. at 29,006. The Court should vacate all aspects of the Rule
that implicate labeling changes, to allow the agency to consider all labeling requirements as a
collective whole, and to avoid penalizing regulated entities (by subjecting them to multiple
rounds of label revisions) for the agencys own transgression of constitutional rights. See Am.
Petroleum Inst. v. EPA, 862 F.3d 50, 71 (D.C. Cir. 2017) (explaining that when the various
aspects of a regulation do not operate entirely independently of one another, vacatur in full is
the proper course); Assn of Private Colls. & Univs. v. Duncan, 870 F. Supp. 2d 133, 154
(D.D.C. 2012) (vacating entire rule because its component parts were obviously intertwined).
- 36 -
IV. PLAINTIFFS ARE ENTITLED TO A PRELIMINARY INJUNCTION AGAINST

ENFORCEMENT OF THE WARNING REQUIREMENTS
The Court weighs four factors in determining whether to enjoin agency action:
(1) whether there is a substantial likelihood of success on the merits; (2) whether the movant
will suffer irreparable harm if the injunction is not granted; (3) whether the injunction will
substantially injure other parties; and (4) whether the public interest would be furthered by the
injunction. R.J. Reynolds Tobacco Co. v. FDA (R.J. Reynolds I), 823 F. Supp. 2d 36, 4243
(D.D.C. 2011). Here, all of the factors require injunctive relief.
First, the text of the TCA and the administrative record together establish that it is
substantially likely that that the warning label regime violates the Constitution and the TCA. See
supra Sections II.AII.C.
Second, Plaintiffs members already have begun to incur serious compliance costs, which
will only mount as the effective date of the rule approaches. Plaintiffs memberslargely family
businesseshave commenced designing new labels and packages, at tremendous expense, and
have prepared and submitted warning plans to the FDA. Patel Decl. 69; Brady Decl. 410;
Trowbridge Decl. 511; Norris Decl. 5, 11. Plaintiffs manufacturer and retailer members
each offer hundreds or thousands of unique products and package configurations. E.g., Brady
Decl. 4; Trowbridge Decl. 6. Recognizing that each discrete package will require adjustments
for the FDAs new labels, Plaintiffs members have already commenced redesign and replacement
efforts expected to cost from hundreds of thousands to millions of dollarson top of the expenses
of printing the new labels, buying new equipment, hiring additional staff, discarding unusable
inventory, and preparing a distribution system for warning rotation. Patel Decl. 9, 14; Brady
Decl. 10; Trowbridge Decl. 711; Norris Decl. 1118. Many of Plaintiffs members also
- 37 -
anticipate that their redesigns will not be complete by August 2018, forcing them to apply the new
labels to their existing packages at the expense of their valuable trade dress. Brady Decl. 6, 9.
Members of Plaintiffs associations are undoubtedly suffering irreparable harm. The
threatened deprivation of First Amendment rights is irreparable harm. See R.J. Reynolds I, 823
F. Supp. 2d at 5051 (where an FDA tobacco warnings requirement threaten[s] First
Amendment interests, there is irreparable harm); see also Elrod v. Burns, 427 U.S. 347, 373
(1976) (plurality op.) (The loss of First Amendment freedoms, for even minimal periods of
time, unquestionably constitutes irreparable injury.); Am. Beverage Assn, 2017 WL 4126944,
at *9 ([A] colorable First Amendment claim is irreparable injury sufficient to merit the grant of
relief.); Gordon v. Holder, 721 F.3d 638, 653 (D.C. Cir. 2013) ([A] prospective violation of a
constitutional right constitutes irreparable injury for these purposes.). And the costs of
preparing to comply with an illegal rule are irreparable because of the difficulty of recovering
them from the agency. R.J. Reynolds I, 823 F. Supp. 2d at 51 n.32; Smoking Everywhere, Inc. v.
FDA, 680 F. Supp. 2d 62, 77 n.19 (D.D.C. 2010).
Third, an injunction will harm neither the FDA nor the public. The FDA has admitted
that [r]eliable evidence on the impacts of warning labels on cigar users does not, to our
knowledge, exist, AR023973, so the agency cannot claim that either its mission or the public
health will be affected by a temporary delay in the implementation of the warning label regime.
The FDA can hardly claim an emergency, given that the FTC warnings have been printed on
most cigar packages and advertisements for decades.
Fourth, an injunction is in the public interest. [E]nforcement of an unconstitutional law
is always contrary to the public interest. Gordon, 721 F.3d at 653; see also Pursuing Am.s
Greatness, 831 F.3d at 511 ([T]here is always a strong public interest in the exercise of free
- 38 -
speech rights otherwise abridged by an unconstitutional regulation.); Am. Beverage Assn, 2017
WL 4126944, at *9 (injunction against health warning ordinance was merited because it is
always in the public interest to prevent the violation of a partys constitutional rights); Stewart
v. D.C. Armory Bd., 789 F. Supp. 402, 406 (D.D.C. 1992) ([T]he public clearly has an interest
in free speech, . . . [which] will be served by ensuring that plaintiffs First Amendment rights are
not infringed before the constitutionality of the regulation has been definitively determined.).
As all factors support Plaintiffs, the Court should preliminarily enjoin the warning system.
V. THE FDAS DECISION TO IMPOSE USER FEES ON CIGARS AND PIPE

TOBACCO, BUT NOT E-CIGARETTES, IS CONTRARY TO LAW
To pay for the TCAs regulatory scheme, Congress imposed user fees on the
manufacturer[s] and importer[s] of tobacco products subject to the TCA. FD&C Act 919, 21
U.S.C. 387s. Congress established a default allocation formula that would assign user fees based
on the classes of tobacco products in existence at the time of the TCA. Id. 919(b)(2)(B)(i)(ii),
387s(b)(2)(B)(i)(ii). Nonetheless, Congress made allowance for innovation and contemplated
user fees for future products, whether originally regulated by Congress or later deemed subject to
the Act by the FDA. Id. 919(b)(2)(B)(iii), 387s(b)(2)(B)(iii) ([N]o user fees shall be assessed
on a class of tobacco products unless such class of tobacco products is listed in section 387a(b) of
this title [originally regulated] or is deemed by the Secretary in a regulation under section 387a(b)
of this title to be subject to this subchapter [newly deemed]. (emphasis added)). All newly
deemed products, including e-cigarettes, meet that simple standard.
The FDA, however, imposed user fees on all regulated tobacco products, except e-
cigarettes. See 81 Fed. Reg. at 28,712. The FDA acknowledged that its decision created an
unjustifiable free rider problem: Manufacturers and importers of e-cigarettes would not pay
for their regulation; instead it would be charged to all other tobacco products, including cigars
- 39 -
and pipe tobacco. Id. The FDAs only rejoinder is that it somehow lacked statutory discretion to
impose user fees on e-cigarettes because they were not listed in Congresss initial allocation
formula. Id. Even if it could create a new fee regime, the FDA said it would decline to do so
because substantial work would be involved. Id. In reaching the conclusion that it was all too
hard, the FDA passed by common metrics that would subject new tobacco products to
Congresss allocation formula (e.g., 20 cigarettes = 1 e-cigarette cartridge = 1 standard
container of moist snuff = 4 large cigars). Id.
The FDAs selective implementation of a user fee is contrary to law for three reasons.
First, the FDA interpreted the statute incorrectlyit does have authority to charge user fees to e-
cigarettesand the Rule should be reversed for that reason alone. Second, charging only some
regulated products turns what Congress designated as a user fee into a tax, which the FDA
lacks authority to impose. Finally, the FDAs User Fee Rule is bald economic favoritism raising
constitutional problems, which the Court should construe the statute to avoid.
A. Congress Did Not Limit User Fees to the Tobacco Products Listed in its
Allocation
The text of the Act plainly does not restrict user fees to those tobacco products listed in the
statutory allocation formula. The agencys erroneous determination to the contrary alone requires
vacatur because the Rule rests on a faulty interpretation of the statute. See Noble Energy, Inc. v.
Salazar, 671 F.3d 1241, 1246 n.5 (D.C. Cir. 2012) ([W]hen an agency incorrectly concludes that
Congress mandated a particular regulatory interpretation of a statute . . . this court will vacate and
remand.). The statute says that the Secretary shall in accordance with this section assess user
fees on, and collect such fees from, each manufacturer and importer of tobacco products subject to
this chapter. FD&C Act 919(a), 21 U.S.C. 387s(a) (emphasis added). E-cigarettesby merit
of the Deeming Ruleare undoubtedly tobacco products subject to this chapter. Id.
- 40 -
The Act then sets out yearly total assessments, followed by allocations by product class,
drawn from another statute. Id. 919(b)(1)(2), 387s(b)(1)(2). That statute, the Fair and
Equitable Tobacco Reform Act of 2004, lists product class allocations for fiscal years 2005
through 2014. 7 U.S.C. 518d(b)(c). Neither provision says that user fees shall be imposed
only on those tobacco products identified in the allocation provisions. Congress generally
knows how to use the word only when drafting laws. Adirondack Med. Ctr. v. Sebelius, 740
F.3d 692, 697 (D.C. Cir. 2014).
Moreover, Section 919(b)(2)(B)(iii) states that user fees may be assessed so long as a
tobacco product is listed in section [901(b)] (i.e., a product is originally regulated) or is deemed
by the Secretary in a regulation under section [901(b)] (i.e., a product is newly deemed). FD&C
Act 919(c)(2)(B)(iii), 21 U.S.C. 387s(b)(2)(B)(iii). In other words, all deemed products,
regardless of whether they are listed in Section 919(b)(2)(B)(i), are subject to user fees. Section
919(b)(2)(B)(iv) similarly shows Congresss intent that manufacturers and importers of regulated
tobacco products pay their own way: If a product is not deemed but otherwise would be
assessed user fees, the amount of user fees . . . shall be reallocated to the classes of tobacco
products [that are deemed and subject to user fees] . . . based on the same relative percentages
otherwise determined under clause (ii). Id. 919(b)(2)(B)(iv) , 21 U.S.C. 387s(b)(2)(B)(iv).
What the statute does not provide for is a shifting of user fees from deemed products not identified
in the TCA to other tobacco products that happened to exist at the time of TCAs enactment.
The structure of the Act reinforces that user fees must be collected for all regulated entities.
Cty. of L.A. v. Shalala, 192 F.3d 1005, 1014 (D.C. Cir. 1999) (court considers the structure and
context of the statutory scheme). Congress intended for the TCA to be self-sustaining, and to
pay for regulation using fees assessed on manufacturers and importers of tobacco products, not
- 41 -
just some tobacco products. H.R. Rep. No. 111-58, pt. 1, at 21 (2009) (emphasis added). Should
e-cigarettes overtake large segments of the marketplace for tobacco products (a trend consistent
with current data), the FDA either would lack sufficient funding for its regulatory activities or
saddle other tobacco products with the crushing expense of regulating e-cigarettes.
Should the Act be ambiguous, the agencys interpretation is plainly unreasonable. The
FDA offered no reason why alternative methods of calculating user fees were too difficult to
implement. See 81 Fed. Reg. at 28,712; see also Emilys List v. FEC, 581 F.3d 1, 22 n.20 (D.C.
Cir. 2009) (administrative convenience excuses must be reasonably explained).
B. Congress Deliberately Imposed a User Fee, Not a Tax
In any event, the Rule is contrary to the term user fee in the Act. User fees are:
(1) predicated on a voluntary act by a payer; (2) paid for a specific service or benefit, including
the benefit of regulation; and (3) not meant for the benefit of others. Natl Cable Television
Assn, Inc. v. United States, 415 U.S. 336, 340-41 (1974); see also U.S. Govt Accountability
Office, GAO-08-386SP, Federal User Fees: A Design Guide 4-5 (2008). When a person or an
entity is obligated to provide funds for government regulation of someone else, the payment is no
longer a user fee but a tax. See Am. Council of Life Insurers v. D.C. Health Benefit Exch. Auth.,
815 F.3d 17, 19 (D.C. Cir. 2016) ([I]n practice the key question [for distinguishing a fee from a
tax] is whether a charge raises revenue merely to cover the cost of offering a service to the
payers of the fee or whether it also raises revenue for purposes that arent especially
beneficial or useful to the payers, or required for the pursuit of their businesses.); Empress
Casino Joliet Corp. v. Balmoral Racing Club, Inc., 651 F.3d 722, 728 (7th Cir. 1992) (user fee is
reasonable estimate of the cost imposed [on the agency] by the person required to pay the fee).
The User Fee Rule calls for some manufacturers of tobacco products pay for the system
as a whole, while others free ride by obtaining the benefits of regulation without any of the
- 42 -
costs. Because cigar, pipe tobacco, cigarette, and other manufacturers provide a benefit for
other members of societye-cigarette manufacturersthe FDAs rule transforms Congresss
user fee into a tax. See Natl Cable Television Assn, 415 U.S. at 341 (distinction between fee
and tax depends on whether payer receives benefit not shared by other members of society);
Am. Council of Life Insurers, 815 F.3d at 21 (assessment on life insurance policies issued by
both regulated and non-regulated entities constituted redistribution of resources mark[ing] the
charge as a tax, not a user fee); see also United States v. Sperry Corp., 493 U.S. 52, 60 (1989)
(user fee must represent fair approximation of the cost of benefits supplied to payer); Seafarers
Intl Union v. U.S. Coast Guard, 81 F.3d 179, 186 (D.C. Cir. 1996) ([A]n agency cannot load
on expenses in the guise of collecting licensing fees.).
C. The User Fee Rule, As Impermissible Economic Favoritism, Raises

Constitutional Questions Under the Fifth Amendment
The FDA, without providing any meaningful reason, preferentially treats e-cigarettes by
mandating that all other tobacco products fund their regulation. This is naked economic
favoritism. Economic discrimination still requires a rational basis under the Fifth Amendments
Due Process Clause. St. Joseph Abbey v. Castille, 712 F.3d 215, 223 (5th Cir. 2013).
Administrative convenienceavoiding a few more paragraphs in the final ruleis not a rational
basis. Cf. Armour v. City of Indianapolis, 132 S. Ct. 2073, 2081 (2012) (rational basis existed
where equal treatment would have yielded benefits too small to justify the administrative
expense). More importantly, Congress did not authorize this economic discrimination and, to the
extent the Act is ambiguous, it should be interpreted to avoid the agencys constitutionally
problematic result. Natl Mining Assn v. Kempthorne, 512 F.3d 702, 711 (D.C. Cir. 2008)
([C]ourts make every effort to construe statutes so as to find their constitutional foundations and
thus avoid needless constitutional confrontations.).
- 43 -
VI. THE FDA ERRONEOUSLY INTERPRETED THE ACT TO TREAT

RETAILERS WHO BLEND FINISHED PIPE TOBACCO AS TOBACCO
PRODUCT MANUFACTURERS
Tobacco retailers, for centuries, have blended pipe tobacco in-store to meet the particular
tastes of their customers. Even though the retailer is blending two finished, FDA-approved pipe
tobacco products, the agency decided to treat it as a manufacturer:
All entities that meet the definition of tobacco product manufacturer in section
900(20) of the FD&C Act, including retail establishments that blend pipe
tobacco, are subject to and must comply with all applicable statutory and
regulatory requirements for tobacco product manufacturers.
81 Fed. Reg. at 29,049 (emphasis added). 11 Now such mom-and-pop retailers must register as
manufacturers and subject themselves to burdensome regulatory requirements made for the
worlds largest companies. See 81 Fed. Reg. at 29,004, 29,049. Each in-store blend will be
dragged through premarket review, product testing, and ingredient listing; each store through
annual registration and recordkeeping requirements. See FD&C Act 904, 905, 909, 910, 21
U.S.C. 387d, 387e, 387i, 387j. The result: Retailers will end their long-standing practice and
stop blending pipe tobacco, despite their customers requests.
The agencys interpretation is wrong. Retailers blending finished pipe tobacco are not
manufacturers. They are simply taking two end-use, FDA-approved products and performing
a service that consumers themselves could do on their own. 12 Congress understood this. When
it referred to manufacture of tobacco products in Section 905 of the FD&C Act, it expressly
11
Tobacco product manufacturer is defined under the statute as any person, including any
repacker or relabeler, who(A) manufacturers, fabricates, assembles, processes, or labels a
tobacco product; or (B) imports a finished tobacco product for sale or distribution in the United
States. FD&C Act 900(20), 21 U.S.C. 387(20).
12
See AR13023940 (As a practical matter, FDA should not want to regulate mixing of blends
by retailers because retailers receive products that were manufactured by persons subject to
FDAs laws and regulations, and blend already mixed and/or processed products on a relatively
small scale in a somewhat imprecise way.); AR08124647 (same); Anderson Decl. 1416.
- 44 -
distinguished retailers: The term manufacture, preparation, compounding, or processing shall
include repackaging or otherwise changing the container, wrapper, or labeling of any tobacco
product package in furtherance of the distribution of the tobacco product from the original place
of manufacture to the person who makes final delivery or sale to the ultimate consumer or user.
Id. 905(a)(1), 21 U.S.C. 387e(a)(1) (emphasis added). Thus, a retailerthe person who
makes final delivery or sale to the ultimate consumer or usercannot be the same as a
manufacturer under the Act.
Even if the statute were ambiguous on this point, the agencys interpretation is not
reasonable. There is no public health reason for eliminating this long-standing practice. Bulk
tobacco that is blended is itself a finished tobacco product produced by a regulated tobacco
product manufacturer who will be subject to premarket review. The FDA has not suggested (nor
could it) that blending of finished pipe tobacco chemically or physically alters the tobacco in any
way, may cause a dangerous chemical reaction in combination, or presents any public health risk
distinct from the end consumer products already approved by the FDA. Presumably, the
hundreds of years experience in blending pipe tobacco would have alerted someone to an acute
health risk by this point. In marked contrast, the agency specifically explained that the manifold
chemicals in cutting-edge e-cigarette liquids could react in ways unforeseen by anyone other
than experts. See 81 Fed. Reg. at 29,04446.
The absence of any similar explanation for pipe tobacco is a hallmark of arbitrary and
capricious overregulation. The APA expects and demands that agencies distinguish between
industries: If there is evidence of public health problems for blended vaping, but not for pipe
tobacco, the agency must treat those industries differently. See Natl Wildlife Fedn v. Hodel,
- 45 -
839 F.2d 694, 722-23 (D.C. Cir. 1988) (secretary too swiftly equated surface mining with
underground mining for the purpose at hand, despite basic differences between operations).
The FDAs interpretation also is unreasonable because it imposes a significant burden
and expense on numerous small businesses around the country. As the Regulatory Flexibility
Act (RFA) makes the interests of small businesses a relevant factor for qualifying rules, 5
U.S.C. 603-604, the APA together with the Regulatory Flexibility Act require that a rules
impact on small businesses be reasonable and reasonably explained, Natl Tel. Coop. Assn v.
FCC, 563 F.3d 536, 540 (D.C. Cir. 2009). The agency, however, admitted that it was unable to
estimate the number of retailers who blend pipe tobacco and that, [w]ithout knowing baseline
numbers of such entities, it is not possible to estimate exit or compliance costs associated with
the rules expectations for manufacturing activities. AR023938; see also AR023917. The
agency unreasonably punted on this issue and violated the APA. See Bus. Roundtable v. SEC,
647 F.3d 1144, 1148-49 (D.C. Cir. 2011); Chamber of Commerce v. SEC, 412 F.3d 133, 144
(D.C. Cir. 2005) ([U]ncertainty may limit what the Commission can do, but it does not excuse
the Commission from its statutory obligation to do what it can to apprise itselfand hence the
public and Congressof the economic consequences of a proposed regulation before it decides
whether to adopt the measure.); Thompson v. Clark, 741 F.2d 401, 405 (D.C. Cir. 1984) (when
a defective regulatory flexibility analysis cause[s] an agency to underestimate the harm inflicted
upon small businesses to such a degree that . . . th[e] harm clearly outweighs the claimed benefits
of the rule, . . . then the rule must be set aside).
VII. PIPES ARE NOT COMPONENTS OF A TOBACCO PRODUCT
The FDA concluded that pipes are components of a tobacco product. See 81 Fed. Reg.
at 29,042. Its interpretation of the statute would require every pipe manufacturer, from one-man
- 46 -
shops in the garage to large corporations, to undergo the crushingly expensive registration and
premarket review process. The agencys contention is wrong.
The term component in the definition of tobacco product in 201(rr) of the FD&C
Act does not include pipes. Tobacco product is defined as any product made or derived from
tobacco that is intended for human consumption, including any component, part or accessory of
a tobacco product (except for raw materials other than tobacco used in manufacturing a
component, part, or accessory of a tobacco product). FD&C Act 201(rr)(1), 21 U.S.C.
321(rr)(1). A component is a constituent part or an ingredient. See Component,
Merriam-Webster, http://www.merriam-webster.com/dictionary/component; New Websters
Comprehensive Dictionary of the English Language 207 (1985 ed.) (component means
constituent). 13 A pipe is not a constituent part or ingredient of a product made or derived from
tobacco, and therefore is not subject to regulation as a tobacco product under the TCA.
This is borne out by the use of the term component in other parts of the statute.
Elsewhere, the term component is used as a concept similar to terms such as additive,
ingredient, and constituent. See, e.g., FD&C Act 907(a)(3)(B)(ii) (discussing an
additive, constituent (including a smoke constituent) or other component of a tobacco product),
907(a)(4)(B)(i) (discussing provisions respecting the construction, components, ingredients,
additives, constituents, including smoke constituents, and properties of the tobacco product),
910(b)(1)(B) (requiring a full statement of the components, ingredients, additives, and
properties, and of the principle or principles of operation, of such tobacco product), 21 U.S.C.
387g(a)(3)(B)(ii), 387g(a)(4)(B)(i), 387j(b)(1)(B); see also TCA 3(5), 123 Stat. at 1782
(designating as one purpose of the TCA to vest the Food and Drug Administration with the
13
In interpreting statutory texts courts use the ordinary meaning of terms unless context
requires a different result. Gonzales v. Carhart, 550 U.S. 124, 152 (2007).
- 47 -
authority to regulate the levels of tar, nicotine, and other harmful components of tobacco
products (emphasis added)). A statutory term is known by the traits of its companions,
including other terms in a series. See Gustafson v. Alloyd Co., Inc., 513 U.S. 561, 575 (1995)
(applying canon of noscitur a sociis). All of these terms denote a material that is integrated with
a product made of tobacco. A pipe carries tobacco, it is not a part of it, and thus is not a
component of a tobacco product.
Even if the term component were ambiguous, the agencys interpretation is not
reasonable, particularly as applied to pipes. The FDA defined component or part to mean:
any software or assembly of materials intended or reasonably expected: (1) [t]o

alter or affect the tobacco products performance, composition, constituents or
characteristics; or (2) [t]o be used with or for the human consumption of a tobacco
product. Component or part excludes anything that is an accessory of a tobacco
product.
81 Fed. Reg. at 29,102. The agency separately defined accessories because accessories,
unlike components or parts, are expected to have little direct impact on the public health. Id. at
28,975. There is nothing in the record to suggest that pipe architecture is being manipulated to
make tobacco more addictive or dangerous and have any other direct effect on public health. See
id. at 29,042; see also, e.g., AR130248 (comments detailing lack of health effect). Instead,
differentiation among pipes is almost all for aesthetic reasons. See Anderson Decl. 1718.
Pipes are better classified as accessories.
The FDAs interpretation will lead to regulatory burdens that pose an existential threat to
the small craftsmen carving premium pipes. The FDA has not adequately considered the effect
of this regulatory action on these particular small businesses. See, e.g., AR023986 (estimating
there are at least 4,610 different types of pipes, excluding hand-crafted pipes); AR023989
(assum[ing] that 5 percent of baseline newly deemed products, including pipes, will exit the
market rather than submit a marketing application); AR02404244 (failing to specifically address
- 48 -
premium pipe craftsman in analysis of economic effect of rule on small entities). Thus, once
again, the agency acted arbitrarily and capriciously in its failure to adequately assess the economic
effects of its rule. See Bus. Roundtable, 647 F.3d at 114849; Thompson, 741 F.2d at 405.
CONCLUSION
Plaintiffs motion for a preliminary injunction and partial summary judgment should be
granted.
Dated: October 3, 2017 Respectfully submitted,
/s/ Michael J. Edney

Michael J. Edney, DC Bar No. 492024
Caroline M. Mew, DC Bar No. 467354
NORTON ROSE FULBRIGHT US LLP
799 9th Street, NW, Suite 1000
Washington, DC 20001-4501
Telephone: (202) 662-0200
Fax: (202) 662-4643
michael.edney@nortonrosefulbright.com
caroline.mew@nortonrosefulbright.com

Cigar and Pipe Retailers Association and
Cigar Rights of America
/s/ Mark S. Raffman

Mark S. Raffman, DC Bar No. 414578
GOODWIN PROCTER LLP
901 New York Avenue NW
Washington, DC 20001
Telephone: (202) 346-4000
Fax: (202) 346-4444
mraffman@goodwinlaw.com

America
- 49 -

Motion For Summary Judgment Partial 16 01460 C1

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Case 1:16-cv-01460-APM Document 62 Filed 10/03/17 Page 1 of 63

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Attorneys for Plaintiff Cigar Association of

IN THE UNITED STATES DISTRICT COURT

CIGAR ASSOCIATION OF AMERICA, )

MEMORANDUM IN SUPPORT OF PLAINTIFFS MOTIONS

Dated: October 3, 2017 Michael J. Edney, DC Bar No. 492024

Attorneys for Plaintiffs International Premium

Mark S. Raffman, DC Bar No. 414578

Attorneys for Plaintiff Cigar Association of

1. The Warning Plan Scheme Is an Unconstitutional Prior

11126 Baltimore Blvd., Inc. v. Prince Georges Cty.,

*44 Liquormart, Inc. v. Rhode Island,

Adirondack Med. Ctr. v. Sebelius,

All. for Nat. Health U.S. v. Sebelius,

All. for Nat. Health U.S. v. Sebelius,

*Am. Beverage Assn v. City & Cty. of S.F.,

Am. Council of Life Insurers v. D.C. Health Benefit Exch. Auth.,

Am. Meat Inst. v. U.S. Dept of Agric.,

Am. Petroleum Inst. v. EPA,

Armour v. City of Indianapolis,

Assn of Private Colls. & Univs. v. Duncan,

Bad Frog Brewery, Inc. v. N.Y. State Liquor Auth.,

Burk v. Augusta-Richmond Cty.,

Bus. Roundtable v. SEC,

Chamber of Commerce v. SEC,

CTIA-The Wireless Assn v. City of Berkeley, Cal.,

Cty. of L.A. v. Shalala,

Del. Dept of Nat. Res. & Envtl. Control v. EPA,

Desert Outdoor Adver., Inc. v. City of Moreno Valley,

Discount Tobacco City & Lottery, Inc. v. United States,

Dist. Hosp. Partners, L.P. v. Burwell,

Emilys List v. FEC,

Empress Casino Joliet Corp. v. Balmoral Racing Club, Inc.,

Entmt Software Assn v. Blagojevich,

*FW/PBS, Inc. v. City of Dall.,

Greater New Orleans Broad. Assn, Inc. v. United States,

Gustafson v. Alloyd Co., Inc.,

Ibanez v. Fla. Dept of Bus. & Profl Regulation, Bd. of Accountancy,

Individual Reference Servs. Grp., Inc. v. FTC,

Intl Dairy Foods Assn v. Amestoy,

*Lorillard Tobacco Co. v. Reilly,

Milavetz, Gallop & Milavetz, P.A. v. United States,

*N.Y. Magazine v. Metro. Transp. Auth.,

Natl Assn of Mfrs. v. SEC,

Natl Assn of Mfrs. v. SEC,

*Natl Cable Television Assn, Inc. v. United States,

Natl Mining Assn v. Kempthorne,

Natl Wildlife Fedn v. Hodel,

Noble Energy, Inc. v. Salazar,

Nutritional Health All. v. Shalala,

Poett v. United States,

Pub. Citizen Inc. v. La. Attorney Disciplinary Bd.,

Pub. Citizen v. FMCSA,

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